KBW upgrades BancorpSouth Bank to 'outperform' on technical, fundamental factors

Upgrades

Keefe Bruyette & Woods analyst Catherine Mealor upgraded Tupelo, Miss.-based BancorpSouth Bank to "outperform" from "market perform" and recommended buying its shares on the view that both technical and fundamental factors like growth, asset sensitivity and credit are inflecting to the positive.

The analyst said technical pressure has weighed on the stock since the company's deal with Cadence Bancorp. closed. But Mealor said technical factors will lift once "we are past deal close … which, coupled with further buyback activity, will be a catalyst to the shares."

The target price was raised to $37.00 from $33.00. The EPS estimates for 2021 was raised to $2.91 from $2.88, while EPS estimates for 2022 and 2023 were set at $2.80 and $3.00, respectively.

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RBC Capital Markets analyst Steven Duong upgraded Indiana, Penn.-based First Commonwealth Financial Corp. to "outperform" from "sector perform" on a positive outlook through 2022 driven by broad-based loan growth that should be enhanced by the equipment finance team next year, stable net interest margin and asset-sensitivity upside, growing fee income businesses, ongoing return of capital and a "benign credit environment."

The price target was raised to $19 from $16. The EPS estimates for 2021 and 2022 were raised to $1.44 and $1.33 from $1.43 and $1.26, respectively.

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KBW's Mealor also upgraded Waldorf, Md.-based The Community Financial Corp. to "outperform" from "market perform" on improvement in core profitability and credit quality.

The target price was raised to $45.00 from $40.00. The EPS estimates for 2021, 2022 and 2023 were raised to $4.42, $3.85, $4.00 from $4.34, $3.75 and $3.82, respectively.

Downgrades

Hovde Group analyst Will Curtiss downgraded Wheeling, W.Va.-based WesBanco Inc. to "market perform" on the view that uncertainty with respect to the near-term outlook is likely to limit the stock's performance relative to peers.

The EPS estimate for 2021 was reduced by 3 cents to $3.46, while estimates for 2022 and 2023 were decreased by 8 cents to $2.52 and $2.62, each. The price target was also reduced by $2 to $37.

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KBW analyst Kelly Motta downgraded Louisville, Ky.-based Stock Yards Bancorp Inc. to "market perform" from "outperform" on valuation but said "fundamentals remain very strong and are positively inclined on pullbacks."

The target price was raised to $67.00 from $59.00. The EPS estimate for 2021 was raised to $3.69 from $3.54, while those for 2022 and 2023 were set at $3.40 and $3.65, respectively.