UBS Negative on BankUnited (BKU), 'We continue to view consensus fee income as overstated'
UBS analyst Brock Vandervliet reiterated a Sell rating and $29.00 price target on BankUnited (NYSE: BKU).
The analyst comments "Following 4Q23 results, we lower our 2024 EPS estimate by 8.4% to $2.18 as our improved NII outlook is offset by weaker fees and higher OpEx. Our 2025 EPS remains unchanged at $2.68, however our better PPNR outlook is offset by an elevated provision expense due to higher loan growth. Improved NII is driven by higher average earning balances; previously we had expected lower AEA balances in '24/'25, however we now expect a lighter decline in 2024 followed by flat balances in 2025. We lower our '24/'25 fee income estimates by 8.3% in both years and increase our OpEx forecasts by ~6% to reflect the higher trajectory from 4Q24 and 2024 guidance. We continue to view consensus fee income as overstated, and think the balance sheet remains challenged in a declining rate environment, and as a result, maintain our Sell rating. "
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Shares of BankUnited closed at $29.90 yesterday.