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BMO Capital Markets initiates coverage of Regions Financial at 'outperform'

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BMO Capital Markets initiates coverage of Regions Financial at 'outperform'

Initiation

BMO Capital Markets analyst Lana Chan initiated coverage of Birmingham, Ala.-based Regions Financial Corp. at "outperform," with a price target of $17.

The analyst said that the financial metrics that the bank's management is trying to achieve would place Regions among the top quartile of its peers.

Chan believes that there is still room for improvement under the bank's continuous improvement project, which is expected to generate revenue growth, manage expenses and optimize capital.

The analyst's EPS estimates for Regions are $1.58 for 2019, $1.73 for 2020 and $1.88 for 2021.

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Downgrade

Ken Zerbe from Morgan Stanley downgraded Westbury, N.Y.-based New York Community Bancorp Inc.'s stock rating to "underweight," with a price target of $11.50.

The analyst said that slowing loan growth and the ongoing compression of the net interest margin are not being reflected in the price of the bank's shares. Zerbe believes that the stock is currently trading at an unusually high valuation premium as compared to its peers, which is not supported by the increasingly difficult commercial real estate outlook, or the bank's below-peer EPS growth though 2020.

The analyst's EPS estimates for New York Community are 82 cents for 2019, 89 cents for 2020 and 98 cents for 2021.