Boenning & Scattergood Downgrades First Commonwealth Financial (FCF) to Neutral

Boenning & Scattergood downgraded First Commonwealth Financial (NYSE: FCF) from Buy to Neutral and removed its price target. The downgrade was tied to valuation.

Analyst Matthew Schultheis said, "Though longer-term trends indicate the company is making strides in improving credit quality (4Q15 an exception), adding revenue streams (mortgage banking build-out and boosting insurance income), and controlling expenses (systems conversion and anticipated cost savings), we believe the current share price reflects the company’s fundamental position. The shares trade at a slight premium to geographic peers of similar size based on 2016 P/E ratio (14.9x vs. 14.6x) but at a discount based on price-to-tangible-book (146% vs. 185%). We believe pricing dichotomy of an in-line P/E and discounted price-to-tangible-book is warranted given higher-than-peer projected earnings growth, but relative return metrics (ROA and ROE) that are below the peer median by a material amount."

For an analyst ratings summary and ratings history on First Commonwealth Financial click here. For more ratings news on First Commonwealth Financial click here.

Shares of First Commonwealth Financial closed at $9.09 yesterday.

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