UPDATE 1-FBR cuts '08 earns view for Wells Fargo, many others

lunes 24 de marzo de 2008 12:42 CET
 

 (Adds details)
 March 24 (Reuters) - Friedman, Billings, Ramsey lowered its
2008 earnings estimates and cut its price target on several
U.S. financial companies, including Wells Fargo & Co (WFC.N: Cotización),
on expectations of higher credit losses and lower gain-on-sale
margins in mortgage banking.
 "We remain cautious in our outlook for financial
institutions, as we expect that capital levels will be further
constrained by growing losses, strained profitability, and
reduced mortgage-backed security (MBS) valuations," analyst
Paul Miller wrote in a note to clients.
 "We consider the industry under-capitalized and expect that
necessary capital raises will dilute common shareholders."
 Banks and thrifts are also likely to take more write-downs
on both agency and non-agency securities in the quarter, as the
lack of liquidity in fixed income markets is pressuring prices
for mortgage securities, Miller said.
 The analyst expects book values to be reduced by negative
mark-downs on securities portfolios in the first quarter. He
estimated that agency MBS will be marked down by 1 percent to 3
percent, and non-agency MBS by 15 percent to 20 percent.
 "Potential marks are more significant for IndyMac Bancorp
IMB.N than the industry as a whole," Miller said. He said 86
percent of IndyMac's $7.3 billion MBS portfolio was non-agency
securities, and just 1 percent agency securities, while most
companies have largely agency portfolios.
 Miller cut his 2008 operating earnings view for National
City Corp NCC.N, but upgraded the stock to "market perform"
from "underperform" on valuation.
 The following table has the price target and estimate
changes on financial companies:
 COMPANY NAME           RATING        PRICE TARGET   2008 EPS
VIEW MARCH 20
                                     New   Old     New   Old
  Close Price
 Cathay General
 Bancorp  (CATY.O: Cotización)      Underperform    $15   $23     $1.85
$2.20   $23.09
 Comerica Inc (CMA: Cotización)     Market Perform  $36   $38     $2.80
$3.10   $39.53
 East West Bancorp
 (EWBC.O: Cotización)               Market Perform  $16   $30     $1.65
$1.90   $19.20
 First Community
 Bancorp FCBP.O       Outperform      $26   $40     $2.65
$2.90   $27.94
 FirstFed Financial  
 FED.N                Underperform    $20   --      $1.70
$2.30   $30.31
 Frontier Financial   
 Corp FTBK.O          Underperform    $15   $17     $1.47
$1.61   $18.20
 IndyMac IMB.N        Underperform    $5    --     -$1.70
-$0.80   $5
 NewAlliance Bancshares
 NAL.N                Market Perform  $12   $14     $0.50
$0.55   $13.08
 National City NCC.N  Market Perform  $10   $14     $0.80
$1.00   $11
 New York Community    
 Bancorp NYB.N        Market Perform  $15   $18     $0.96
$0.95   $18.98
 People's United 
 Financial Inc (PBCT.O: Cotización) Outperform      $15   $17     $0.55
$0.65   $17.54
 Signature Bank
 (SBNY.O: Cotización)               Outperform      $30   $34     $1.45
$1.50   $27.32
 SVB Financial Group   
 (SIVB.O: Cotización)               Market Perform  $46   $50     $2.40
$2.75   $45.94
 Sovereign Bancorp
 SOV.N                Underperform    $8    --      $0.55
$0.70   $10.15
 TCF Financial (TCB.N: Cotización)  Market Perform  $17   $18     $1.65  
--    $20.16
 Washington Mutual
 (WM.N: Cotización)                 Underperform    $9    --     -$1.15
-$1.00   $11.70
 Washington Federal
 WFSL.O               Market Perform  $20   $17     $1.45
$1.50   $24.43
 Wells Fargo (WFC.N: Cotización)    Underperform    $23   --      $2.30
$2.40   $32.55
 Zions Bancorp (ZION.O: Cotización) Market Perform  $47   $55     $4.25
$5.00   $50.52
  (Reporting by Tenzin Pema and Ramya Dilip in Bangalore;
Editing by Jarshad Kakkrakandy, Vinu Pilakkott)