NEW YORK (TheStreet) -- Shares of Boston Private Financial (BPFH) - Get Boston Private Financial Holdings, Inc. Report were gaining 13% to $12.61 Thursday following a report that two Canadian banks were interested in buying the regional bank.
Royal Bank of Canada (RY) - Get Royal Bank of Canada Report was reportedly in talks to acquire Boston Private before it acquired City National (CYN) last month, according to the Wall Street Journal. RBC allegedly valued Boston Private at about $2 billion before deciding the valuation was too high, and that it wanted to acquire a wealth-management platform instead of a private banking platform.
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It isn't clear if Boston Private is currently running an active auction process.
TheStreet Ratings team rates BOSTON PRIVATE FINL HOLDINGS as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate BOSTON PRIVATE FINL HOLDINGS (BPFH) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- BPFH's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 7.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- BOSTON PRIVATE FINL HOLDINGS's earnings per share declined by 38.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BOSTON PRIVATE FINL HOLDINGS increased its bottom line by earning $0.72 versus $0.59 in the prior year. This year, the market expects an improvement in earnings ($0.81 versus $0.72).
- The gross profit margin for BOSTON PRIVATE FINL HOLDINGS is currently very high, coming in at 89.71%. Regardless of BPFH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BPFH's net profit margin of 13.37% is significantly lower than the industry average.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Commercial Banks industry and the overall market, BOSTON PRIVATE FINL HOLDINGS's return on equity is below that of both the industry average and the S&P 500.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Commercial Banks industry. The net income has significantly decreased by 31.1% when compared to the same quarter one year ago, falling from $17.67 million to $12.18 million.
- You can view the full analysis from the report here: BPFH Ratings Report