UPDATE - Barclays Downgraded CIT Group (CIT) to Equalweight; Valuation Call
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Price: $53.50 --0%
Rating Summary:
12 Buy, 15 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
12 Buy, 15 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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UPDATE - Barclays downgraded CIT Group (NYSE: CIT) from Overweight to Equalweight. PT lowered from $48 to $46.
Barclays analyst says, "We are lowering our rating on CIT as the growth in book value from core earnings and accretion of fresh start accounting (FSA) discounts appears to be delayed from this year into 2012 and beyond. We also believe the stock is due for a rest and could trade in the low 40s for the near term until management can demonstrate that 1) core earnings are positive and growing steadily, 2) regulatory relationships are back to normal, 3) its bank-centric funding strategy is developed, and 4) new business volume is outpacing portfolio run-off and asset sales. Once these catalysts fall into place in the next 12-18 months, as we expect, the stock may have greater upside potential...We are updating our full-year 2011 EPS estimate to a $1.45 loss ($1.04 loss pre-FSA) and our full-year 2012 estimate to a $0.92 loss ($1.35 positive EPS pre-FSA) to reflect these expectations"
"However, we note that the company's potential to unlock more than $9 in "hidden" book value over time from net accretable discount (plus an additional $9/share from deferred tax assets, which we estimate have a $3-4 PV) should help limit the stock's downside."
To see all upgrades/downgrades on shares of CIT, visit our Analyst Ratings page.
Barclays analyst says, "We are lowering our rating on CIT as the growth in book value from core earnings and accretion of fresh start accounting (FSA) discounts appears to be delayed from this year into 2012 and beyond. We also believe the stock is due for a rest and could trade in the low 40s for the near term until management can demonstrate that 1) core earnings are positive and growing steadily, 2) regulatory relationships are back to normal, 3) its bank-centric funding strategy is developed, and 4) new business volume is outpacing portfolio run-off and asset sales. Once these catalysts fall into place in the next 12-18 months, as we expect, the stock may have greater upside potential...We are updating our full-year 2011 EPS estimate to a $1.45 loss ($1.04 loss pre-FSA) and our full-year 2012 estimate to a $0.92 loss ($1.35 positive EPS pre-FSA) to reflect these expectations"
"However, we note that the company's potential to unlock more than $9 in "hidden" book value over time from net accretable discount (plus an additional $9/share from deferred tax assets, which we estimate have a $3-4 PV) should help limit the stock's downside."
To see all upgrades/downgrades on shares of CIT, visit our Analyst Ratings page.
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