UPDATE: Keefe, Bruyette & Woods Assumes Regions Financial (RF) at Underperform
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Keefe, Bruyette & Woods analyst David Konrad assumes coverage on Regions Financial (NYSE: RF) with a Underperform rating and a price target of $18.00.
The analyst comments "Regions has done an impressive job in terms of de-risking its loan book and improving returns through strong expense control and running off non-core loan products. However, we are assuming coverage with an Underperform rating due to challenges generating organic growth, near-term reliance on derivative benefits and outsized exposure to industry service charge/overdraft pressures. As a result, we do not expect a meaningful earnings lift to higher short-term rates compared to peers. Given the effective pull-forward of higher rates from derivatives, benefits of a more open economy in its footprint and headwinds from service charges (our 2023 service charge estimate is 17% below 2019 results), we expect will move from a 16% discounted valuation in 2021 to a 6% premium on 2023 estimates."
Shares of Regions Financial closed at $20.26 yesterday.
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