Enterprise Financial Upped to Strong Buy on Impressive Q2
On Aug 2, Zacks Investment Research upgraded Enterprise Financial Services Corp. EFSC to a Zacks Rank #1 (Strong Buy).
Improved Profitability Drives Upgrade
The uptick in the rank of this Clayton, MO-based bank was driven by strong estimate revisions on the back of impressive second-quarter 2016 results.
On Jul 28, Enterprise Financial released its second-quarter 2016 results. The company reported net income of 61 cents per share, comfortably outpacing the Zacks Consensus Estimate by 13%. Results benefited from increase in both net interest income and noninterest income, partially offset by higher expenses. Notably, the company delivered positive earnings surprises in all the trailing four quarters with an average beat of 9.9%.
On adjusted basis, net income increased 28.7% year over year to $9.9 million. Net interest margin improved 6 basis points year over year to 3.52%.
Further, efficiency ratio declined to 56.30% in second-quarter 2016 from 57.64% in the prior-year quarter. Generally, lower ratio is indicative of the improved efficiency of the bank.
Also, Enterprise Financial’s return on average common equity improved to 10.89% from 9.34% in the prior-year quarter and return on average assets increased to 1.07% from 0.93% recorded in the prior-year quarter.
As of Jun 30, 2016, total loans increased 12% year over year to $2.90 billion, while deposits increased 12.5% to $3.02 billion.
The Zacks Consensus Estimate for 2016 increased 5.1% to $2.28 per share over the past 30 days. Also, for 2017, it moved north 2.7% to $2.32 per share.
Other Stocks to Consider
Some other top-ranked stocks in the finance space include Credit Acceptance Corp. CACC, Hancock Holding Company HBHC, and HomeStreet, Inc. HMST. All three stocks sport the same Zacks rank as Enterprise Financial.
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ENTERPRISE FINL (EFSC): Free Stock Analysis Report
HANCOCK HLDG CO (HBHC): Free Stock Analysis Report
CREDIT ACCEPT (CACC): Free Stock Analysis Report
HOMESTREET INC (HMST): Free Stock Analysis Report
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