Upgrades
Oppenheimer & Co. analysts Chris Kotowski and Kevin Tripp upgraded JPMorgan Chase & Co., Morgan Stanley and SVB Financial Group to "outperform" from "perform" with price targets of $167, $111 and $702, respectively.
The banks are "three strong companies that we have long admired but until recently thought were relatively more fully valued," the analysts wrote.
Kotowski and Tripp increased their 2022 core EPS estimates for JPMorgan, Morgan Stanley and SVB Financial to $11.30, $7.76 and $36.03 from $10.39, $7.07 and $29.22, respectively.
The analysts also raised their 2023 core EPS estimates for the companies to $12.86, $8.85 and $46.75 from $11.71, $8.09 and $38.94, respectively.
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Janney Montgomery Scott analyst Timothy Coffey upgraded Chico, Calif.-based TriCo Bancshares to "buy" from "neutral" on his expectation of better-than-expected earnings power going forward. Coffey reiterated his fair value estimate of $49.
The company's stock has sold off against the backdrop of better earnings and currently trades at less than 10x forward estimates, according to the analyst.
"In our opinion, a stock with improving earnings power, conservative credit standards and solid management should not trade at such a discount," Coffey wrote.
The analyst increased his 2022 and 2023 EPS estimates for TriCo by 30 cents each to $3.68 and $4.18, respectively.
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Janney's Coffey also upgraded his rating on Billings, Mont.-based First Interstate BancSystem Inc. to "buy" from "neutral" and reiterated his fair value estimate of $42.
The analyst said the valuation to forward earnings does not reflect the estimated improvement in forward earnings.
Coffey raised his 2022 core EPS estimate for First Interstate by 6 cents to $2.56 and increased his 2023 estimate by 13 cents to $3.69.
Downgrade
Stephens analyst Matt Breese downgraded his rating on the shares of New York Community Bancorp Inc. to "underweight" from "equal-weight" and lowered his price target to $9 from $12.
Breese said he sees a tougher path ahead for the Hicksville, N.Y.-based company following its first-quarter earnings. He also said he believes the company will trade at a discount to peers given its "below-average" profitability levels and "weak" funding profile.
Furthermore, the analyst mentioned concerns regarding New York Community Bancorp's pending acquisition of Flagstar Bancorp Inc. The companies extended their merger agreement by about six months and are now seeking approval from the Office of the Comptroller of the Currency instead of the Federal Deposit Insurance Corp.
"We have our doubts that [New York Community Bancorp] will be able to close the [Flagstar Bancorp] deal through an OCC charter given the balance sheet composition," Breese wrote.
The analyst reduced his operating EPS estimates for New York Community Bancorp considering an "increasingly challenging" mortgage environment with higher rates. He now expects EPS of $1.29 and $1.20 in 2022 and 2023, respectively, compared to his previously estimated EPS of $1.38 for both years.
