There’s a lot to be optimistic about in the Financial sector as 2 analysts just weighed in on Progressive (PGR) and Flagstar Bancorp (FBC) with bullish sentiments.
Progressive (PGR)
B.Riley FBR analyst Randy Binner reiterated a Buy rating on Progressive yesterday and set a price target of $81. The company’s shares opened today at $65.24.
Binner noted:
“On January 23rd, PGR reported December and 4Q18 operating EPS of $0.56 and $1.20, versus our estimate of $0.35 and B. Riley FBR/consensus 4Q18 estimates of $1.00/1.01. There was approximately $0.10 of one-time tax benefits, putting the core 4Q18 result at ~$0.46/$1.10. Top- line growth Y/Y continued its double digit growth trend for 2018. Net premiums written (NPW) growth in the month was +19.8% Y/Y , versus our +15.0% estimate. The reported underlying loss ratio (ex-cat and PYD) came in lower at 69.2% in December, versus our 70.5% estimate. Cat losses were lower at $0M versus our $39M and prior-year development (PYD) of $15M was worse than our forecast of no development. The 19.7% expense ratio for the month was better than our estimate at 20.4%.”
According to TipRanks.com, Binner is a 5-star analyst with an average return of 11.7% and a 64.3% success rate. Binner covers the Financial sector, focusing on stocks such as American Equity Investment Life, American International Group, and Health Insurance Innovations.
Progressive has an analyst consensus of Moderate Buy, with a price target consensus of $73.57, representing a 12.8% upside. In a report issued on January 9, Barclays also upgraded the stock to Buy with a $73 price target.
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Flagstar Bancorp (FBC)
In a report released today, Steve Moss from B.Riley FBR maintained a Buy rating on Flagstar Bancorp, with a price target of $38. The company’s shares opened today at $30.15.
Moss said:
“Flagstar Bancorp (FBC) reported 4Q18 results that exceeded our EPS estimate due to lower credit costs and expenses; however, lower-than-expected deposit balances from the WFC acquisition and a poor mortgage banking environment are likely to limit earnings growth in 2019. Despite current challenges, we like FBC for its continued transformation to diversify its earnings stream and increase net interest income. We expect NII, which is more stable than volatile mortgage banking and carries a higher valuation multiple, will account for 53% of total revenues in 2019, up from 40% in 2016. FBC trades at 9.7x our 2019E, a 20% discount to small- cap banks which trade at 12.1x 2019 estimates.”
According to TipRanks.com, Moss is a 1-star analyst with an average return of -0.7% and a 43.0% success rate. Moss covers the Financial sector, focusing on stocks such as Zions Bancorporation National Association, Seacoast Banking Corporation Of Florida, and The Bank of Princeton.
Flagstar Bancorp has an analyst consensus of Hold, with a price target consensus of $31.50.
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