E*TRADE (ETFC) Debt Actions Validate Accretion Potential - Nomura

Nomura Securities analyst Steven Chubak reiterated a Buy rating and $26 price target on E*TRADE (NASDAQ: ETFC) noting debt actions validate accretion potential.

Chubak commented, "E*TRADE announced various actions today to help reduce its corporate debt footprint by $400m, which should yield $30m of annual interest expense savings, and is consistent with management’s long-term strategic plan to reduce its debt footprint to $1bn (~2% of assets). While these actions were largely expected, we were surprised to see shares underperform following the announcement. Our take on the announcement remains constructive; while these actions were largely expected, as noted in our June capital deep-dive, we expect the firm to continue to optimize its funding profile, which should yield additional interest expense savings beyond 2015 (+$0.06), putting the firm on a path towards generating >$1.80 of earnings in 2016E. FY14E EPS at $0.99; FY15E EPS at $1.07."

For an analyst ratings summary and ratings history on E*TRADE click here. For more ratings news on E*TRADE click here.

Shares of E*TRADE closed at $22.83 yesterday.

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