Upgrades
* Frank Schiraldi rated Malvern Bancorp Inc.'s stock "buy," up from "hold," citing the company's growth story and the improving economy.
The Sandler O'Neill & Partners analyst also pointed to a year-to-date drop in stock price, saying a "significant bounce back" should be expected this quarter. That said, Paoli, Pa.-based Malvern is essentially "operating from one quarter behind," after missing its growth opportunity in the last three months of 2017, as well as working with a bigger expense base.
Schiraldi lowered the price target by $2 to $26.
* Hovde Group's Joseph Fenech raised Seacoast Banking Corp. of Florida's stock rating to "outperform," with a price target of $29.
It was previously "market perform" and $30.
Seacoast's stock checks all the boxes for performance drivers, Fenech wrote, with deposit costs at just 29 basis points in the recent quarter, expected loan growth in the "mid-teens" and a loan-to-deposit ratio of 83%. Florida banks are also likely to gain more from tax reform and to get a boost in loans after the hurricane-related pause, he added.
Downgrade
* Hovde's Fenech, on the other hand, downgraded BankUnited Inc. to "market perform."
The analyst had considered keeping it at "outperform" on valuation and the possibility that investors will prefer to focus on near-term positives rather than on intermediate-term challenges. BankUnited's management has been "largely successful" at changing investors' perception, so much so that "the Street [no longer] glances at the earnings release solely to see if loan growth expectations were met for that particular quarter," Fenech wrote.
But the stock has been "basically flat" year over year, and the company will be hit with the expiration of its loss-share agreement in 2019 — the economics of which had been "the main driver of financial results for several years."
Fenech lowered the price target by a dollar to $44.
