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FIG Partners initiates coverage of People's United Financial at 'outperform'

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FIG Partners initiates coverage of People's United Financial at 'outperform'

Upgrades

Sandler O'Neill & Partners analyst Mark Fitzgibbon upgraded Iselin, N.J.-based Provident Financial Services Inc.'s stock rating to "buy" from "hold," with a price target of $26.

In the analyst's opinion, recent stock price weakness caused by panic selling, liquidations to satisfy fund redemptions and tax loss selling has created an opportunity for strong upside potential.

Fitzgibbon expects Provident to show strong profitability measures in 2019. The analyst believes that the company's "balance sheet positioning, strong capital position, superior core profitability and takeover appeal warrant a premium valuation."

Fitzgibbon's EPS estimate for Provident is $1.82 for 2019.

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Fitzgibbon upgraded Boston-based Brookline Bancorp Inc.'s stock rating to "buy" from "hold," with a price target of $15.

He expects Brookline to continue to report above average loan and deposit growth, which will allow the company to drive strong profitability.

Fitzgibbon's EPS estimate for Brookline is $1.10 for 2019.

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The Sandler O'Neill & Partners analyst also upgraded Brockton, Mass.-based HarborOne Bancorp Inc. (MHC)'s stock rating to "buy" from "hold," with a price target of $19.

Fitzgibbon expects a "transformational" jump in earnings growth in 2019, caused by accretion from the merger with Warwick, R.I.-based Coastway Bancorp Inc.

His EPS estimate for HarborOne is 77 cents for 2019.

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Fitzgibbon upgraded Westfield, Mass.-based Western New England Bancorp's stock rating to "buy" from "hold," and lowered the price target to $10.50 from $11.

The analyst expects the company to report improving profitability measures in 2019. The company has an improving outlook based on its market presence, strong capital base and mid-single digit growth characteristics.

His EPS estimate for Western New England is 55 cents for 2019.

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Terry McEvoy of Stephens Inc. upgraded Cincinnati-based Fifth Third Bancorp's stock rating to "overweight," with a price target of $27.

McEvoy said that an internal profitability improvement plan was successful at the company. He also wrote that improvement in the company's profitability may outshine that of peers and should trigger multiple expansions at Fifth Third.

The company's merger with Chicago-based MB Financial Inc. is expected to be accretive by 2% in 2019 and 7% in 2020.

McEvoy's EPS estimate for Fifth Third is $3.10 for 2020.

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McEvoy also upgraded San Francisco-based First Republic Bank's stock rating to "overweight," with a price target of $98.

The analyst wrote that First Republic has kept deposit costs lower than some of the estimates, even though the net interest margin fell for the company while it expanded for more pure commercial banks. The company also has a low risk balance sheet and loss history.

Initiation

David Bishop of FIG Partners initiated coverage of Bridgeport, Conn.-based People's United Financial Inc. at "outperform," and set a price target of $18.

Bishop wrote that the company's low risk operating model has the potential to lead to better than current valuation of the shares. The analyst also expects the company's return on assets to improve as efficiencies from the recent acquisition of Farmington, Conn.-based First Connecticut Bancorp Inc. and the pending acquisition of Belmont, Mass.-based BSB Bancorp Inc. are recognized.

Bishop's EPS estimates for People's United are $1.42 for 2019 and $1.53 for 2020.