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* National Bank Financial Inc. analyst Gabriel Dechaine upgraded Bank of Montreal's stock rating to "outperform" from "sector perform" and raised the stock price target to C$108 from C$106.
The analyst increased the Montreal-based bank's EPS estimate to C$8.76 from C$8.71 for 2018, to reflect the bank's second-quarter outperformance. The analyst also raised Bank of Montreal's EPS estimate for 2019 to C$9.32 from C$9.18 to reflect various factors, primarily lower provision for credit losses and a lower share count.
Dechaine wrote that "M&A risk has been the primary element restraining our rating on [Bank of Montreal]." While Bank of Montreal's M&A risk remains a concern, "we do not want to over-emphasize it," Dechaine added.
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* Stephen Scouten of Sandler O'Neill & Partners LP lowered Stuart, Fla.-based Seacoast Banking Corp. of Florida's stock rating to "hold" from "buy" and increased the price target to $32 from $31.
The analyst wrote that he continues to view Seacoast Banking's franchise "favorably in the current environment given its low-cost deposit base, healthy liquidity profile, strong loan growth opportunities in its growing Florida markets, and additional upside to come via accretive M&A." However, according to Scouten, Seacoast Banking's near-term upside from the current position looks limited with the company's shares now trading at 14.8x his 2019 EPS estimate.
Initiation
* Daniel Cardenas of Raymond James is now covering Youngstown, Ohio-based United Community Financial Corp.'s stock. He gave it an "outperform" rating and a price target of $12.
The analyst wrote that United Community Financial has come out as a "dependable, yet transformational banking story with a track record of improving profitability and credit discipline, factors which should drive double-digit EPS growth over the next couple of years." According to the analyst, United Community Financial is well-positioned to deliver on improved performance while taking advantage of its improving valuation multiple to expand its franchise through acquisitions.
