UPDATE: UBS Upgrades TCF Financial (TCF) to Buy
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(updating comment, correcting PT)
UBS analyst Brock Vandervliet upgraded TCF Financial (NASDAQ: TCF) from Neutral to Buy with a price target of $37.00 (from $46.00.)
The analyst comments "The TCF / CHFC combination (closed August 2019) creates a premier Midwest regional bank able to demonstrate meaningful near term cost saves (13% of combined expense base by Q4) and revenue synergies (loan growth & fee growth) over time. The combination makes TCF a very strong “self-help” story at a time of tremendous macro turmoil. The fundamental path is now clear for expense reduction, top-line growth, and buyback to generate mid-teens average EPS growth 2021-2023. Also, our buyback assumption (10% through 2022) could prove conservative. We reduce our 2020/21 EPS forecast to $3.81/$4.34, inclusive of the 50 bp emergency FF cut, our expectation of 50 bps in further cuts and incrementally lower loan growth. While our 2021 EPS forecast is 5% below consensus that is an artifact of the macro turmoil. Consensus should drift lower. TCF’s 2021 multiple of ~6x prices in a very high degree of uncertainty."
Shares of TCF Financial closed at $26.65 yesterday.
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