Jefferies Initiates Coverage On Small Cap Banks Sterling & Berkshire Hills
In a note released early Friday morning, Jefferies analyst, Casey Haire initiated coverage on two small cap commercial banks.
Sterling Bancorp: (NYSE: STL) Buy, $14 price target
"Thanks to merger benefits, STL is poised to demonstrate strong operating leverage regardless of interest rates with strong loan growth carrying the top line higher, while cost saves keep expense growth muted. Stock trades inline with peer group despite superior organic growth prospects, which bodes well for multiple expansion assuming successful execution of merger benefits," Haire wrote.
Haire stated, "BHLB boasts double-digit loan growth prospects, but EPS growth is limited given multiple NIM headwinds holding top-line growth in check while opportunities to reduce costs via branch redux are limited by a relatively thin loan/deposit ratio. Valuation metrics are attractive at 13x 2015, which limits downside, but warranted given negative revision risk and a running-in-place EPS forecast."
Following the release of the note, shares of Sterling traded up about one percent while shares of Berkshire Hills dropped 0.80 percent.
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