Atlantic Equities Downgrades First Republic Bank (FRC) to Neutral, 'lack of clarity and unprecedented uncertainty'

March 17, 2023 7:53 AM EDT
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Price: $12.36 -1.36%

Rating Summary:
    13 Buy, 16 Hold, 1 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 9 | Down: 10 | New: 12
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(Updated - March 17, 2023 7:55 AM EDT)

Atlantic Equities analyst John Heagerty downgraded First Republic Bank (NYSE: FRC) from Overweight to Neutral.

The analyst comments "Given the lack of clarity and unprecedented uncertainty surrounding First Republic, we are downgrading our rating to Neutral. Management is exploring different strategic options which may include a full sale or divestments of parts of the loan portfolio. The limited information provided implies that the balance sheet has increased substantially, which may well necessitate a capital raise. The size of any capital raise will depend on whether new deposits are used to pay down short-term borrowing. We are lowering our net revenue forecasts by 29% in FY23 and by 34% in FY24. Even assuming that costs decline by 9-12% over the next two years, our adj. EPS forecasts decline by 95% in FY23 and by 94% in FY24. We reiterate that the exceptionally high level of uncertainty makes providing forecasts challenging and we are thus withdrawing our price target."

For an analyst ratings summary and ratings history on First Republic Bank click here. For more ratings news on First Republic Bank click here.

Shares of First Republic Bank closed at $34.27 yesterday.

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