Raymond James analyst Daniel Cardenas upgraded Franklin, Tenn.-based Franklin Financial Network Inc.'s stock rating to "outperform" from "market perform" and gave it a price target of $32.
The analyst wrote that Franklin Financial's high cost of deposits should allow the company to take market share away from competitors at a premium to their rates but at a discount to its current funding levels.
Cardenas added that he believes the market may be undervaluing Franklin Financial's current core deposit base, especially given the attractiveness of the Nashville market.
Cardenas believes company management has the means to improve net interest margin over coming quarters, including a rebalancing of the bank's securities portfolio and opportunities to reduce the cost of funds.
Cardenas left his 2019 and 2020 EPS estimates for the company at $2.52 and $2.85, respectively.
Credit Suisse analyst Michael Zaremski upgraded Fairfield, Ohio-based Cincinnati Financial Corp.'s stock rating to "outperform" from "neutral" and increased its price target to $110 from $90.
Zaremski wrote that Cincinnati's ability to "cherry pick" the best risks within its excess and surplus segment, thanks to a broker license that most of its competitors do not have, as well as $450 million of capital that will be freed up from its life insurance segment in the coming years, are two of the company's positives that investors underappreciate.
His adjusted EPS estimates for the company are $3.84 for 2019 and $3.93 for 2020.