Compass Point Sees 2nd Step On Horizon For Kearny Financial

Dwight Einhorn
August 7, 2014

In a report published Thursday, Compass Point analyst Laurie Havener Hunsicker reiterated a Buy rating and $17.00 price target on Kearny Financial (NASDAQ: KRNY).

In the report, Compass Point noted, “We continue to believe a 2nd-step is on the horizon. We reiterate our Buy-rating and our $17 price target, representing par with exchange ratio and 1.0x FCTB (fully-converted tangible book). In the event of a 2nd-step announcement, our 12-month price target would jump to $19.50, or 1.15x PF FCTB, representing 28% above current trading levels. We have assumed a 101% IPO-P/TB appraisal, which is in-line with the recently closed second step of $3 billion-asset sized Meridian Bancorp (EBSB - Buy, $12 PT), which closed at a filed 104% IPO-P/TB and is currently trading 7% above issue price. KRNY offers investors a unique opportunity to invest in a well-capitalized, 130+ year old, $3.5 billion-asset sized, NYC-MSA-based bank, at a discount to fully-converted tangible book value.”

Kearny Financial closed on Wednesday at $15.26.

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