In a report published Tuesday, Stephens analyst Matt Olney initiated coverage on Regions Financial (NYSE: RF) with an Overweight Rating and $12.50 price target.
Olney noted expense levers to improve the efficiency ratio should allow the company to be in the low 60 percent range in late 2014. The analyst remarked, “We believe this will be driven by further branch rationalization, restaffing existing branches, lower professional fees and lower FDIC insurance costs.”
Stephens added that Regions Financial has expanded net interest margin since 2010 and sees this trend continuing through 2015. Olney contributes the margin expansion to debt refinancing and positive earning asset remix.
The analyst continued, “We see three catalysts to move EPS forecast above consensus expectations of $0.91 in 2015 including 1) expense management, 2) margin expansion, and 3) accelerated capital deployment.”
Shares of Regions Financial closed at $10.85 on Monday.
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