Wells Fargo downgrades Synchrony Financial to 'equal weight'

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Compass Point analyst David Rochester upgraded San Antonio-based Cullen/Frost Bankers Inc. to "neutral" from "sell."

Cullen/Frost's shares have a smaller chance of underperformance over the next year following their recent underperformance compared to the company's bank group shares starting in the first-quarter earnings season, Rochester said. The analyst considered the company's "more balanced" risk-reward and the expectation of a "decent" one-year stock return.

Rochester maintained the price target of $128, as well as the 2022 and 2023 core EPS estimates of $8.47 and $9.80, respectively.

Downgrade

Wells Fargo Securities analyst Donald Fandetti downgraded Synchrony Financial to "equal weight" from "overweight," saying it will be hard for the company's stock to outperform with investors worrying about private label cards.

The analyst also believes that investors will avoid Synchrony shares until there is "greater clarity on the direction of the U.S. macro environment."

Fandetti lowered the price target by $13 to $32. The analyst also increased his 2022 EPS estimate by 14 cents to $6.07, reduced his 2023 estimate by 50 cents to $5.20 and introduced a 2024 estimate of $5.40.

Dropped coverage

Piper Sandler analyst Frank Schiraldi discontinued coverage of Prudential Bancorp Inc. following the completion of the company's sale to Lancaster, Pa.-based Fulton Financial Corp.

Initiation

Piper Sandler analyst Brendan Nosal initiated coverage of Louisville, Ky.-based Stock Yards Bancorp Inc. with a rating of "neutral" and a price target of $65.

The "neutral" rating recognizes the "company's premium return profile is already paired against an appropriately premium valuation," according to the analyst. Stock Yards' profitability profile more than accounts for where the company's shares trade, Nosal mentioned.

The analyst estimates EPS of $3.19 for 2022 and $4.00 for 2023.