(Adds analyst's comments, background)
Sept 5 (Reuters) - Robert W. Baird downgraded M&T Bank Corp (MTB.N) to "neutral" from "outperform" on valuation, and said a difficult macro-economic environment will result in more modest revenue growth trends for the large mid-Atlantic regional bank as well as higher credit costs through most of 2009.
"While we believe M&T is in an adequate capital position currently, we think M&T has somewhat less capital flexibility to take advantage of new business opportunities relative to some of its higher-quality peers," analyst David George wrote in a note to clients.
M&T's capital flexibility and status as a "safe haven" stock may be hurt by a potential impairment on its $300 million interest in Bayview Lending Group LLC, a commercial mortgage lender, and its $160 million government sponsored enterprises-preferred exposure, George said.
These issues, however, are manageable from a capital and earnings perspective, the analyst added.
He cut his price target on the stock to $72 from $75.
In July, M&T Bank reported a 25 percent drop in second-quarter profit, hurt by mounting credit losses from residential real estate.
Shares of the company closed at $72.60 Thursday on the New York Stock Exchange. (Reporting by Tenzin Pema in Bangalore; Editing by Himani Sarkar)