Jefferies Downgrades Regions Financial (RF) to Hold

Jefferies downgraded Regions Financial (NYSE: RF) from Buy to Hold with a price target of $14.00 (from $11.50) to reflect post-election stock/EPS dynamics.

Analyst Ken Usdin commented, "We downgrade RF to Hold after a very strong post-election performance, with shares up 21% since the 11/8 close. We see an above-average EPS pickup in our Bull scenario (+25% over our current '18 est.), however, RF’s Bull ROTCE should remain below peer averages. RF trades at 10.5x our Bull scenario (vs. 11x for peers). On a relative basis, shares trade at 84% of the current '17 S&P 500 P/E multiple vs. its 75% percentile historical valuation of 83% (since 2001). Our $14 price target, which is based on a probability-weighted scenario analysis, implies shares trade at 14.5x our current '18 EPS estimate of $1.01. Upside risks to our downgrade: faster progress on cost saves, a quicker rebound in loan growth."

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

Shares of Regions Financial closed at $13.36 yesterday.

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