Compass Point Upgrades Provident Financial Holdings (PROV) to Buy

Compass Point upgraded Provident Financial Holdings (NASDAQ: PROV) from Neutral to Buy with a price target of $18.00 (from $16.00).

The firm comments, :We upgrade our rating to Buy from Neutral and raise our price target to $18 from $16 on PROV shares following the release of March 2013 earnings. The March earnings report and the recent cheapening of shares makes the risk versus reward of owning PROV favorable, despite what is broadly a more challenging mortgage banking environment and our expectation for substantial 2014 consensus EPS estimate revisions. Given PROV's footprint and origination mix, mortgage banking results should hold up better than most industry peers and more importantly what we view is priced into the stock. The resumption of share repurchases post quiet period should also set a near term floor to the share price. 3Q13 earnings were driven primarily by strong mortgage banking volumes and better than anticipated gain on sale. Earlier in March, the company announced an additional stock repurchase plan that authorizes the board to purchase up to 5% of the company's stock and it is currently effective. Our $18 price target represents a multiple of 14.2 our 2013 EPS estimate and 1.15x estimated YE14 BVPS."

For an analyst ratings summary and ratings history on Provident Financial Holdings click here. For more ratings news on Provident Financial Holdings click here.

Shares of Provident Financial Holdings closed at $15.71 yesterday.

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