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Macquarie upgrades BMO on US market exposure


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Macquarie upgrades BMO on US market exposure


* Sandler O'Neill & Partners' Mark Fitzgibbon raised Flushing Financial Corp.'s rating in light of the recent pullback.

Flushing's stock had closed at $28.66 on Feb. 1 and then at $26.89 on Feb. 14, making it "too cheap to ignore," Fitzgibbon wrote. The analyst upgraded it to "buy" from "hold," and kept the price target at $31.

The Uniondale, N.Y.-based company is also notably trading at 149% of its tangible book value per share, he calculated, compared to peers' 195%. Flushing's profitability is "solid and improving," and the company has "ample takeover appeal," Fitzgibbon added.

* Macquarie Research's Mike Rizvanovic upgraded Bank of Montreal to "outperform" from "neutral," to reflect "its favorable exposure to the US market where ... growth opportunities are more abundant."

In his report on large-cap Canadian banks, Rizvanovic projects 2018 EPS growth of 6.7% for the Big Six, instead of his previous 4.9% estimate, thanks largely to the benefits of higher net interest margins.

The Big Six are expected to report the recent quarter's earnings beginning Feb. 22.

Notable reiteration

* Wedbush's Peter Winter commented on U.S. Bancorp's $613 million penalty over Bank Secrecy Act and anti-money laundering matters.

"Although this resolves the BSA/AML shortcomings from a legal standpoint," the analyst noted, "the enforcement action by the OCC is a separate matter and is still in force." The company's improved processes are now being back-tested by a third party and being reviewed by the Federal Reserve. "Management continues to expect that to last through the first half of 2018," he added.

Winter has a "neutral" rating on the stock and a $58 price target.