Downgrades
* Sandler O'Neill & Partners analyst Mark Fitzgibbon downgraded three Mid-Atlantic banks on valuation.
Investors Bancorp Inc.'s stock had closed at $14.55 on Nov. 29, compared with Fitzgibbon's $15.50 price target. The current trading price, Fitzgibbon calculates, is approximately 146% of the Short Hills, N.J.-based company's tangible book value per share.
The analyst's price target for Iselin, N.J.-based Provident Financial Services Inc. is $30. On Nov. 29, it closed at $28.75, or about 217% of tangible book value per share, according to Fitzgibbon.
And his price target for Uniondale, N.Y.-based Flushing Financial Corp. is $31. The stock closed Nov. 29 at $29.73, or 164% of tangible book value per share.
Their stock ratings were all lowered to "hold" from "buy."
* Also downgraded on valuation was Atlanta-based State Bank Financial Corp.
Gabelli & Co.'s Steve Comery lowered the rating to "hold" from "buy," with an estimated 2017 private market value of $30 and an estimated 2018 PMV of $33. The stock had closed Nov. 29 at $31.42.
Comery wrote: "We still like the fundamentals of the business and continue to see acquisition potential in the name."
Gabelli & Co. is the marketing name for G.research LLC.
* And BMO Capital Markets' Lana Chan lowered Cathay General Bancorp's rating to "market perform" from "outperform."
The Los Angeles-based company's stock closed at $44.75 on Nov. 29, near Chan's price target of $45. The analyst noted that "fundamentals remain positive," but that the stock historically trades 5% to 7% lower than peers, with no "sustained periods" of better performance.
The analyst wrote: "[W]e think investors will be focused [on the opportunities] in 2018. ... Recall that prior to the storm, the island was expecting $2.5 billion of austerity per year." But now, there will be about $5 billion in direct federal aid, infusions from the Federal Emergency Management Agency and other agencies, and an estimated $25 billion to $35 billion of catastrophe claim money.
