Companies in the Financial sector have received a lot of coverage today as analysts weigh in on Progressive (PGR), Comerica Inc (CMA) and Ellington Financial (EFC).
Progressive (PGR)
B.Riley FBR analyst Randy Binner maintained a Buy rating on Progressive yesterday and set a price target of $96. The company’s shares closed yesterday at $80.20.
Binner commented:
“Progressive (PGR-Buy, $96 PT) reported June and 2Q19 operating EPS of $0.36 and $1.42, versus our estimate of $0.40 and B. Riley FBR/consensus 2Q19 estimates of $1.45/1.43. PGR’s June loss pick was somewhat elevated, which drove the lower result. Top-line again grew double digits. Net premiums written (NPW) growth in the month was +13.8% Y/Y , versus our +12.5% estimate. The reported underlying loss ratio (ex-cat and PYD) came in higher at 69.3% in June, versus our 68.0% estimate. Cat losses were lower than expected at ~$45M versus our $82M and prior-year development (PYD) of $35M was worse than our forecast of no development. The 20.6% expense ratio for the month was in line with our estimate at 20.9%. Net investment income for June was better than our estimate at $90M compared to our $88M.”
According to TipRanks.com, Binner is a 5-star analyst with an average return of 13.2% and a 67.0% success rate. Binner covers the Financial sector, focusing on stocks such as American Equity Investment Life, Colony Credit Real Estate Inc, and Health Insurance Innovations.
The word on The Street in general, suggests a Moderate Buy analyst consensus rating for Progressive with a $81.43 average price target, implying a 1.5% upside from current levels. In a report issued on July 2, Raymond James also maintained a Buy rating on the stock with a $90 price target.
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Comerica Inc (CMA)
In a report released yesterday, Steve Moss from B.Riley FBR reiterated a Hold rating on Comerica Inc, with a price target of $73. The company’s shares closed yesterday at $69.19, close to its 52-week low of $63.69.
Moss wrote:
“Comerica’s (CMA) 2Q19 results were disappointing due to significantly higher credit costs related to existing problem energy credits. The outlook is also a challenge as credit costs are likely to be higher going forward, share repurchases are likely to be lower, and NIM/NII pressure should occur due to lower LIBOR driven by Fed interest rate cuts. Our estimates assume the Fed will lower rates by 50bps in 3Q19. This should result in 2020 EPS that is below expectations (we model a 4% decline for 2020 EPS), and keep the stock range bound until earnings visibility improves. We reiterate our Neutral rating but lower our price target from $75 to $73 to reflect our revised estimates and a downward bias to those estimates due to the possibility of additional rate cuts and lower share repurchases as profitability declines.”
According to TipRanks.com, Moss is a 1-star analyst with an average return of -0.8% and a 44.0% success rate. Moss covers the Financial sector, focusing on stocks such as Seacoast Banking Corporation Of Florida, Meta Financial Group, and Axos Financial Inc.
The word on The Street in general, suggests a Hold analyst consensus rating for Comerica Inc with a $77.88 average price target, implying a 12.6% upside from current levels. In a report issued on July 8, Raymond James also downgraded the stock to Hold.
Ellington Financial (EFC)
B.Riley FBR analyst Timothy P. Hayes reiterated a Buy rating on Ellington Financial today and set a price target of $18.50. The company’s shares closed yesterday at $18.30, close to its 52-week high of $18.50.
Hayes observed:
“We reiterate our Buy rating and $18.50 price target on shares of Ellington Financial (EFC) following the announcement of a 3.5M-share secondary offering (with a 525K-share greenshoe). We believe the proceeds of the offering will be used to fund investment in core strategies, including RMBS/CMBS, residential and CRE mortgage loans, and consumer loans. The deal priced at $17.66/share, which implies the deal will be executed at 0.93x EFC’s June 30 book value estimate of $18.91, and at a 3.5% discount to EFC’s stock price of $18.30 (as of the close on July 17). We expect the transaction to be less than 1% dilutive to book value per share, and we believe management continues to see opportunities to put capital to work accretively.”
According to TipRanks.com, Hayes is a 4-star analyst with an average return of 7.7% and a 77.5% success rate. Hayes covers the Financial sector, focusing on stocks such as Fidus Investment Corporation, Ready Capital Corporation, and Saratoga Investment Corp.
Ellington Financial has an analyst consensus of Moderate Buy, with a price target consensus of $19.25, representing a 5.2% upside. In a report issued on July 9, Maxim Group also initiated coverage with a Buy rating on the stock with a $20 price target.
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