UPDATE: BMO Capital Downgrades OneMain (OMF) to Market Perform
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BMO Capital analyst James Fotheringham downgraded OneMain (NYSE: OMF) from Outperform to Market Perform with a price target of $60.00.
The analyst comments "After its impressive run, we downgrade OMF on valuation exclusively; P/E and P/TCE have tripled over the past year and are now well above historical averages. Our $60 target implies limited upside remaining, predicated on 3.5x pro forma TCE (normalized 50% RoTCE × 7x P/E) plus $3.60 per share excess capital (valued at 0.5x). This is not a call on the quarter, but our 1Q21E $2.01 estimate is 6% below consensus on higher operating expenses. We prefer market-oriented asset managers (KKR, APO, BEN, and VCTR) and investment banks (MS and GS)."
Shares of OneMain closed at $55.21 yesterday.
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