The Livingston, NJ-based bank holding company is one of the most well-known middle market lending franchises in the U.S., JMP said.
"This lengthy history has included numerous acquisitions and divestures of businesses and a reorganization, effectively creating many iterations of what is infrequently referred to as Commercial Investment Trust," the firm added. "In our view, the current iteration of CIT is one step closer to achieving a steady state of operations as a regional U.S. bank."
Investors will have a clearer view of steady earning asset growth after the bank's $1.5 billion acquisition of OneWest Bank completes, JMP said. The divestiture of the company's $9.9 billion asset aircraft leasing business should also unlock value.
CIT Group stock closed down by 0.05% to $40.50 on Thursday.
Separately, 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. TheStreet Ratings has this to say about the recommendation:
We rate CIT GROUP INC as a Buy with a ratings score of B-. This is driven by a number of 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, impressive record of earnings per share growth, compelling growth in net income, attractive valuation levels and expanding profit margins. We feel its 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:
- The revenue growth came in higher than the industry average of 1.3%. Since the same quarter one year prior, revenues rose by 13.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- CIT GROUP INC has improved earnings per share by 31.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CIT GROUP INC increased its bottom line by earning $5.73 versus $3.19 in the prior year. This year, the market expects an improvement in earnings ($5.77 versus $5.73).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Commercial Banks industry average. The net income increased by 34.6% when compared to the same quarter one year prior, rising from $514.90 million to $693.10 million.
- The gross profit margin for CIT GROUP INC is rather high; currently it is at 53.15%. Regardless of CIT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CIT's net profit margin of 64.46% significantly outperformed against the industry.
- You can view the full analysis from the report here: CIT