UPDATE: Atlantic Equities Upgrades First Republic Bank (FRC) to Overweight
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Atlantic Equities analyst John Heagerty upgraded First Republic Bank (NYSE: FRC) from Neutral to Overweight with a price target of $188.00 (from $210.00).
The analyst comments "We are upgrading First Republic to Overweight. Our analyses of the last Fed rate-tightening cycle and the financial crisis indicate that First Republic should continue to perform strongly over the next few years. In particular, we believe that First Republic's NIM will be relatively flat during this tightening cycle due to a reduced reliance on higher-cost funding as well as a quicker repricing of the loan portfolio due to the speed at which the mortgage rate has repriced. In addition, First Republic's focus on more affluent consumers should prove beneficial for both credit quality and sustained mortgage growth. Lastly, at 16x 12-month forward EPS, First Republic's valuation is almost 1 standard deviation below its long-run average, a level from which it has historically bounced strongly. We therefore upgrade to an Overweight recommendation."
Shares of First Republic Bank closed at $144.20 yesterday.
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