Wedbush analyst David Chiaverini has maintained their neutral stance on RF stock, giving a Hold rating on January 8.
David Chiaverini has given his Hold rating due to a combination of factors including Regions Financial Corp.’s recent performance and future guidance that aligns with previous expectations. The recent quarter’s results were mostly in line with estimates, exhibiting a balance of positive and negative indicators. On the positive side, there was an unexpected increase in the net interest margin (NIM), which suggests improved profitability from lending activities. However, this was counterbalanced by weaker than anticipated growth in earning assets. Additionally, there has been a noticeable deterioration in credit quality, evidenced by a rise in nonperforming assets and net charge-offs, although this increase is partly attributable to a specific unsecured consumer portfolio loan sale. Chiaverini also notes a decline in the proportion of noninterest bearing deposits, which may impact the bank’s cost of funds and liquidity profile.
Looking ahead to the bank’s 2024 guidance, it aligns closely with prior expectations, indicating a low single-digit loan growth and a stabilization of deposit totals by mid-year. However, the forecast for net interest income (NII) for the full year 2024 came in slightly below expectations, which could suggest a more challenging interest income environment. The guidance also suggests that profitability measures such as NIM are expected to remain relatively stable, with a slight increase by the year’s end. From an expense perspective, the bank anticipates adjusted noninterest expenses to be slightly lower than estimated, which could contribute to positive operating leverage in the latter half of 2024 and into 2025. Despite these insights, Chiaverini maintains a neutral stance, suggesting that the current stock valuation adequately reflects the company’s outlook, and there may not be significant upside potential to justify a more bullish rating at this time.
In another report released on January 8, UBS also maintained a Hold rating on the stock with a $21.00 price target.
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Based on the recent corporate insider activity of 28 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of RF in relation to earlier this year.
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Regions Financial (RF) Company Description:
Regions Financial Corp. operates as a bank holding company. It provides traditional commercial, retail and mortgage banking services, as well as other financial services in the fields of investment banking, asset management, trust, mutual funds, securities brokerage, insurance and other specialty financing. The company operates through the following segments: Corporate Bank, Consumer Bank, and Wealth Management. The Corporate Bank segment represents the company’s commercial banking functions including commercial and industrial, commercial real estate and investor real estate lending. The Consumer Bank segment holds the company’s branch network, including consumer banking products and services related to residential first mortgages, home equity lines and loans, small business loans, indirect loans, consumer credit cards and other consumer loans. The Wealth Management segment offers individuals, businesses, governmental institutions and non-profit entities a range of solutions to help protect grow and transfer wealth. Regions Financial was founded in 1971 and is headquartered in Birmingham, AL.
Read More on RF:
- Regions Financial Preliminary Earnings Webcast Summary
- Options Volatility and Implied Earnings Moves Today, January 19, 2024
- Regions Financial (NYSE:RF) Delivers Resilient Q4 Performance
- Regions Financial sees FY24 NII $4.7B-$4.8B, adjusted NII $2.3B-$2.4B
- Regions Financial reports Q4 net interest margin 3.60% vs. 3.99% last year
