NEW YORK (TheStreet) -- Cullen/Frost Bankers Inc. (CFR) - Get Report was upgraded to "market perform" from "underperform" at BMO Capital on Thursday.

The firm said it raised its rating on the financial holding company based on a valuation call.

BMO Capital said it has become "incrementally more constructive on Cullen/Frost" as it believes the company "is more optimistic on the loan growth outlook than most of its peers...Cullen/Frost has greatly expanded its client base during the downturn due to an increased calling effort."

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BMO also said it feels the company has a "better margin outlook than most of its peers."

The firm maintained its $75 price target on Cullen/Frost.

Separately, TheStreet Ratings team rates CULLEN/FROST BANKERS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate CULLEN/FROST BANKERS INC (CFR) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, good cash flow from operations, increase in net income and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 12.7%. Since the same quarter one year prior, revenues slightly increased by 9.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The gross profit margin for CULLEN/FROST BANKERS INC is currently very high, coming in at 96.69%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 26.35% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 131.88% to $27.63 million when compared to the same quarter last year. In addition, CULLEN/FROST BANKERS INC has also vastly surpassed the industry average cash flow growth rate of -97.59%.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Commercial Banks industry average. The net income increased by 11.4% when compared to the same quarter one year prior, going from $59.66 million to $66.47 million.
  • CULLEN/FROST BANKERS INC has improved earnings per share by 8.5% 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, CULLEN/FROST BANKERS INC reported lower earnings of $3.80 versus $3.85 in the prior year. This year, the market expects an improvement in earnings ($4.19 versus $3.80).
  • You can view the full analysis from the report here: CFR Ratings Report

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