UPDATE: Evercore ISI Upgrades First Republic Bank (FRC) to Outperform

January 18, 2022 5:13 AM EST
Get Alerts FRC Hot Sheet
Price: $153.12 +2.76%

Rating Summary:
    14 Buy, 14 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 14 | Down: 23 | New: 12
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(Updated - January 18, 2022 5:13 AM EST)

Evercore ISI analyst John Pancari upgraded First Republic Bank (NYSE: FRC) from In Line to Outperform with a price target of $220.00 (from $215.00).

The analyst comments "We are upgrading First Republic to Outperform from In Line coming out of 4Q results and post the stock’s meaningful pullback. We are increasing our target price from $215 to $220, which implies 23x our 2023 EPS estimate. Bottom line: Despite our slightly more conservative EPS outlook post 4Q and ongoing mgmt uncertainty, the stock appears oversold, in our view. Specifically, we see upside to FRC’s shares as concerns re: management turnover are likely overdone, FRC’s growth outlook continues to compare favorably to peers, and the stock’s valuation creates a compelling entry point. We acknowledge FRC is one of the least asset-sensitive names and growth-to-value rotation has been a headwind. However, we believe the shares more than discount these factors – while fundamental trends remain robust. FRC’s shares are down 7% MTD vs an 11% increase in the BKX. At 23x our 2022 EPS est, FRC still trades at a meaningful premium to peers at 14x. That said, this is against anticipated mid-teens B/S and PPNR growth that well exceed peer levels. FRC trades at 2.9x TBV, a 32% premium to peers – albeit well below its 3-year and 5-year avg premium of 51%. We think this premium is more than warranted in light of our projected TBV growth of 11-12% for FRC in 2022 and 2023, vs 5-6% at peers."

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 $192.06 yesterday.

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