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Compass Point upgrades Melrose Bancorp, downgrades Randolph Bancorp

Upgrade

* Compass Point Research & Trading LLC analyst Laurie Hunsicker upgraded Melrose Bancorp Inc. to "buy" from "neutral," increasing her price target to $19 from $15.50.

Hunsicker wrote that the Melrose, Mass.-based company offers investors good opportunity, as it is well-capitalized and has great valuation.

Furthermore, the analyst noted that the company is approaching its third year of completing its conversion on Oct. 22, which will clear the regulatory policy prohibiting it to sell.

Hunsicker also wrote that the company is over-capitalized compared to its peers, which she views positively.

As of the fourth quarter of 2016, she wrote, the company's loan portfolio "remained pristine," and has consisted of 79% residential, 11% commercial real estate, 5% construction and 5% home equity.

Downgrade

* Compass Point's Hunsicker downgraded Stoughton, Mass.-based Randolph Bancorp to "neutral" from "buy," but increased her price target to $16 from $13.

Hunsicker wrote that the downgrade was due to "stock price appreciation."

The analyst revised the company's 2017 annual EPS estimate to 7 cents from 34 cents. Her reduction was due to the company's increased core expenses, increased loan loss provision and slow mobile banking business. She projected that benefit and option plans will be added by the end of the full-year 2017 estimate, which will further reduce the company's EPS.

The company, the analyst wrote, is well-capitalized. But she added that it will not be engaging in any potential near-term acquisitions, as it is banned from selling by regulatory policies for three years, following the completion of its conversion last year.

Coverage reinstatement

* Hilliard Lyons analyst Andrew Stapp reinstated his coverage of Minneapolis-based U.S. Bancorp with a "neutral" rating and a price target of $54.

Stapp noted that the company's financial performance is strong, but that this is reflected by its premium valuation.

Stapp wrote that U.S. Bancorp had a higher return on common equity of 13.4% in 2016, as compared to the 8.3% return on common equity of its peer group median. The company also had a stronger noninterest income last year at 44.9% of operating revenues, as compared to the 40.1% operating revenues of peers.

He wrote that the company's stock offers a 2.1% dividend yield, which is higher than the 1.9% dividend yield for both its peers and the S&P 500.