E*TRADE (ETFC) Structural Change Should Boost ROE - Raymond James

Raymond James analyst Patrick O'Shaughnessy reiterated an Outperform rating and $57.00 price target on E*TRADE (NASDAQ: ETFC) after the company reported results that displayed a shift to emphasize increased share repurchases over balance sheet growth.

The analyst believes this change will impact top-line results but post healthy EPS growth while boosting its return on equity. He stated "E*Trade shifted $6.6 billion of customer deposits to third party banks in 2Q19, including $4.5 billion relating to sales of lower yielding securities. Further, management indicated that if the current rate environment persists, it plans to continue directing new deposits off balance sheet (and potentially further shift current deposits to third parties). While these actions will reduce revenue, management believes focusing on EPS and ROE will maximize shareholder value over time".

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 $46.39 yesterday.

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