TD Ameritrade (AMTD) Stock Downgraded at Deutsche Bank
NEW YORK (TheStreet) -- TD Ameritrade's (AMTD) - Get Report stock rating was reduced to "hold" from "buy" at Deutsche Bank. The firm has a $31 price target on shares.
The downgrade comes even though the Omaha, NE-based brokerage reported better-than-expected results for the 2016 second quarter.
TD Ameritrade posted adjusted earnings of 39 cents per share, topping analysts' estimates by a penny. Revenue was $838 million, while analysts' expected $830 million.
"However, IDA (Insured Deposit Account) revenue of $234 million was slightly below our $237 million estimate on IDA yield of 1.11% vs. our 1.14% est., & management expects more IDA yield pressure with $1.5 billion of balances reinvesting at lower yields in 3Q & FDIC surcharge of $5mn/qtr for 2 years," Deutsche Bank wrote in an analyst note.
With the stock trading near the firm's $31 price target, shares appear less appealing. Deutsche Bank would wait for a much better entry point before viewing as attractive.
Overall, the firm views the company's model and management execution as remaining solid under new CEO Tim Hockey.
Shares of TD Ameritrade closed higher by 2.32% to $29.93 on Tuesday.
Separately, TheStreet Ratings Team has a "Buy" rating with a score of B on the stock.
The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and growth in earnings per share.
The team believes its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: AMTD