NEW YORK (TheStreet) -- Shares of Regions Financial (RF) rose 5.01% to $9.66 in late morning trading Friday after Credit Suisse initiated coverage on the stock with a "neutral" rating and a $10 price target.
"Our target price of $10 equates to 1.1 times our forward tangible book value estimate, which we view as appropriate, given 2015E ROE of 7% and ROTE of 10%," the firm wrote in a research note Friday. "RF continues to make progress de-risking the loan portfolio, improving credit quality, and managing the NIM and expenses."
More than 13.6 million shares had changed hands as of 11:33 a.m., compared to the daily average volume of 16,546,100.
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Regions Financial closed at $9.20 on Thursday.
Separately, TheStreet Ratings team rates REGIONS FINANCIAL CORP as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate REGIONS FINANCIAL CORP (RF) a BUY. This is driven by a few notable 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 attractive valuation levels and expanding profit margins. We feel these 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:
- The gross profit margin for REGIONS FINANCIAL CORP is currently very high, coming in at 93.89%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 15.72% trails the industry average.
- REGIONS FINANCIAL CORP's earnings per share declined by 17.6% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, REGIONS FINANCIAL CORP's EPS of $0.78 remained unchanged from the prior years' EPS of $0.78. This year, the market expects an improvement in earnings ($0.80 versus $0.78).
- RF, with its decline in revenue, slightly underperformed the industry average of 0.5%. Since the same quarter one year prior, revenues slightly dropped by 4.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, RF has underperformed the S&P 500 Index, declining 14.17% from its price level of one year ago. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
- You can view the full analysis from the report here: RF Ratings Report