NEW YORK (TheStreet) -- Shares of First Niagara Financial Group (FNFG) were gaining by 14.3% to $10.24 on heavy trading volume on Wednesday morning, following a report that the regional bank is exploring a possible sale.
The Buffalo, NY-based bank has hired JPMorgan to explore the potential sale, or other opportunities, according to Bloomberg.
First Niagara has reportedly contacted several potential buyers as it looks to sell itself. New YorkCommunity Bancorp (NYCB), Toronto-DominionBank (TD), and Huntington Bancshares (HBAN) are among the reported potential suitors for the bank, according to Bloomberg.
First Niagara currently has about 400 branches in New York, New Jersey, Pennsylvania, Connecticut, and Massachusetts. The company has a market value of about $3.18 billion.
About 4.7 million shares of First Niagara were traded by 10:08 a.m. on Wednesday, above the company's average trading volume of about 2.2 million shares a day.
Separately, TheStreet Ratings team rates FIRST NIAGARA FINANCIAL GRP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate FIRST NIAGARA FINANCIAL GRP (FNFG) a BUY. This is driven by multiple strengths, 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, solid stock price performance, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- FNFG's revenue growth has slightly outpaced the industry average of 1.2%. Since the same quarter one year prior, revenues slightly increased by 0.6%. 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.
- After a year of stock price fluctuations, the net result is that FNFG's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- Net operating cash flow has increased to $172.00 million or 31.29% when compared to the same quarter last year. Despite an increase in cash flow of 31.29%, FIRST NIAGARA FINANCIAL GRP is still growing at a significantly lower rate than the industry average of 2804.12%.
- The gross profit margin for FIRST NIAGARA FINANCIAL GRP is currently very high, coming in at 85.48%. Regardless of FNFG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 15.85% trails the industry average.
- FIRST NIAGARA FINANCIAL GRP's earnings per share declined by 21.1% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, FIRST NIAGARA FINANCIAL GRP swung to a loss, reporting -$2.12 versus $0.75 in the prior year. This year, the market expects an improvement in earnings ($0.57 versus -$2.12).
- You can view the full analysis from the report here: FNFG