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UBS Securities downgrades Comerica to 'neutral' from 'buy'

Upgrades

Tyler Stafford from Stephens Inc. upgraded Columbus, Ga.-based Synovus Financial Corp.'s stock rating to "overweight" from "equal-weight" and increased the price target to $43 from $39.

After an "exhaustive" review process of assessing Weston, Fla.-based FCB Financial Holdings Inc.'s largest commercial real estate loans, the analyst feels significantly more comfortable with the underlying credit quality, which supports Stafford's view for a minimum in-line peer valuation.

He wrote that the credit concerns are unwarranted and Synovus should trade in-line with peers.

Stafford's EPS estimates for the company are $3.69 for 2019 and $4.02 for 2020.

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Brock Vandervliet from UBS Securities upgraded Memphis, Tenn.-based First Horizon National Corp.'s stock rating to "buy" from "neutral" and raised the price target to $19 from $15.

He wrote that First Horizon's net interest margin was at its highest in the second quarter of 2018, but has been "flat to down" since, as compared to increased net interest margin in the sector. The analyst believes this to be the reason behind the stock's underperformance, along with integration of Charlotte, N.C.-based Capital Bank Financial Corp.

Vandervliet expects net interest margin should be more resilient than the sector for the remainder of 2019.

His EPS estimates for the company are $1.59 for 2019 and $1.65 for 2020.

Downgrades

Vandervliet downgraded Dallas-based Comerica Inc.'s stock rating to "neutral" from "buy" and reduced the price target to $73 from $100.

He expects the company's earnings to decrease through 2020 before increasing once net interest margin bottoms. He further wrote that the company failed to move decisively to lower its asset sensitivity, which has already led to significant under-performance.

The analyst does not expect material acceleration in loan and investment securities growth, considering a flatter yield curve making adding investment securities "unattractive."

Vandervliet's EPS estimates for the company are $7.91 for 2019 and $7.73 for 2020.

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Vandervliet downgraded Dallas-based Texas Capital Bancshares Inc.'s stock rating to "sell" from "neutral" and decreased the price target to $54 from $62.

He wrote that the company is facing three challenges including declining credit quality, net interest margin compression and flattening net interest income performance, and slowing growth in the portfolio of loans held for investment.

According to him, Texas Capital suffers from many pressure points including a poorly positioned balance sheet for declining London interbank offered rate and Fed Fund rates.

The analyst's EPS estimates for the company are $5.97 for 2019 and $5.71 for 2020.