Downgrades
Wolfe Research analysts downgraded New York-based JPMorgan Chase & Co., writing that the company remains best-in-class, but that its current multiple gap is tough to justify.
Additionally, the analysts noted elevated day-one risk from implementing the current expected credit loss standard.
The analysts downgraded the company's stock rating to "peer perform" from "outperform" and raised the price target to $140 from $134. The analysts raised their 2020 EPS estimate to $10.75 from $10.66, but lowered their 2021 EPS estimate to $11.24 from $11.26.
--------------------------
Barclays analysts downgraded San Francisco-based First Republic Bank due to price-to-earnings ratio multiple expansion in 2019.
The analysts downgraded the company's stock rating to "equal weight" from "overweight" and raised the price target to $126 from $110. The analysts lowered their 2020 EPS estimate to $5.40 from $5.45 and established a 2021 EPS estimate of $6.00.
--------------------------
Barclays analysts also downgraded San Francisco-based Wells Fargo & Co., writing that its consumer banking leadership has regressed since its retail banking sales practice issues came to light and that it will take time to rebuild momentum.
The analysts downgraded the company's stock rating to "equal weight" from "overweight" and raised the price target to $59 from $55. The analysts lowered their 2020 EPS estimate to $4.35 from $4.45 and established a 2021 EPS estimate of $4.75.
--------------------------
Wells Fargo Securities analyst Jared Shaw downgraded Green Bay, Wis.-based Associated Banc-Corp; Kansas City, Mo.-based Commerce Bancshares Inc.; San Francisco-based First Republic Bank; and Kansas City, Mo.-based UMB Financial Corp.
The analyst wrote that the four companies will have a more challenging time raising their already high valuation premiums and that valuation could be at risk with any greater credit losses.
The stock ratings of the four companies were downgraded to "underweight" from "equal weight."
Shaw maintained his 2019 EPS estimate of $1.89, but lowered his 2020 EPS estimate to $1.75 from $1.85 for Associated Banc-Corp.
For Commerce Bancshares, the analyst lowered his 2019 EPS estimate to $3.50 from $3.70. His 2020 EPS estimate for the company was lowered to $3.39 from $3.65.
The analyst maintained his 2019 EPS estimate of $5.12, but raised his 2020 EPS estimate to $5.23 from $5.09 for First Republic Bank.
For UMB Financial, Shaw maintained his 2019 EPS estimate of $4.79, but lowered his 2020 EPS estimate to $4.35 from $4.37. His price target for the stock was lowered to $60 from $63.
--------------------------
Wells Fargo Securities analyst Mike Mayo downgraded Cleveland-based KeyCorp, writing that the company's "disjointed" footprint in the Northeast, Midwest and Northwest has contributed to 25 years of stock underperformance.
The analyst downgraded the company's stock rating to "underweight" from "equal weight." He maintained his 2019 EPS estimate of $1.65 and his 2020 EPS estimate of $1.80 for the company.
--------------------------
Mayo downgraded Dallas-based Comerica Inc., also writing that the company's footprint is "disjointed."
The analyst expects below-peer EPS growth from 2019 to 2021, given that the company is a "mostly plain vanilla bank" that depends on traditional spread revenue.
The analyst downgraded the company's stock rating to "underweight" from "equal weight." He maintained his 2019 EPS estimate of $7.75 and his 2020 EPS estimate of $7.10 for Comerica.
--------------------------
Mayo also downgraded Minneapolis-based U.S. Bancorp, writing that the company "frittered away a degree of its competitive advantage by not capitalizing more when their competitors were weaker."
The analyst downgraded the company's stock rating to "underweight" from "equal weight." He maintained his 2019 EPS estimate of $4.33 and his 2020 EPS estimate of $4.40 for the company.
--------------------------
Goldman Sachs Equity Research analysts downgraded Buffalo, N.Y.-based M&T Bank Corp., writing that limited EPS growth makes the premium multiple harder to justify.
The analysts downgraded the company's stock rating to "neutral" from "buy." The analysts' 2019 EPS estimate for the company was raised to $13.58 from $13.55, while the 2020 EPS estimate was increased to $13.60 from $13.50. The 2021 EPS estimate was lowered to $14.20 from $14.55.
The 12-month price target for the stock was raised to $184 from $169.
--------------------------
Goldman Sachs analysts also downgraded U.S. Bancorp driven primarily by expectations that the company is positioned for negative operating leverage in 2020.
The analysts downgraded the company's stock rating to "sell" from "neutral." The analysts lowered the 2019 EPS estimate to $4.34 from $4.36, while the 2020 EPS estimate was decreased to $4.28 from $4.36. The 2021 EPS estimate was maintained at $4.53.
The price target for the stock was revised to $55 from $59.
Upgrades
Barclays analysts upgraded Charlotte, N.C.-based Bank of America Corp. because of the significant improvement in its consumer banking franchise and the benefits of its recent technology investments.
The analysts upgraded the company's stock rating to "overweight" from "equal weight" and raised the price target to $43 from $36. The analysts raised their 2020 EPS estimate to $3.00 from $2.95 and established a 2021 EPS estimate of $3.30.
--------------------------
Barclays analysts also upgraded Providence, R.I.-based Citizens Financial Group Inc. and Cincinnati-based Fifth Third Bancorp, driven primarily by the strides the companies have made to improve their franchises.
The analysts upgraded the stock ratings of the two companies to "overweight" from "equal weight," writing that Citizens Financial and Fifth Third are two of the cheaper regional bank stocks despite both institutions improving their franchises.
The analysts lowered their 2020 EPS estimate to $3.95 from $4.05 and established a 2021 EPS estimate of $4.30 for Citizens Financial. The price target for the stock was raised to $49 from $43.
For Fifth Third, the analysts lowered their 2020 EPS estimate to $3.00 from $3.05 and established a 2021 EPS estimate of $3.15. The price target for the stock was raised to $38 from $34.