CATC - Cambridge Bancorp cut to Neutral at Piper after recent rally
2023-07-18 13:47:26 ET
Cambridge Bancorp ( NASDAQ: CATC ) stock dipped 3.5% in Tuesday afternoon trading as Piper Sandler downgraded the regional bank stock to Neutral from Overweight as its recent rally limits upside over the near-term.
Since bottoming out on May 4, CATC has climbed about 26%, outpacing peers' 12% rise.
So, trading at 102% of tangible book value and ~12 times Piper's 2023 EPS estimate, "the stock no longer looks inexpensive," analyst Mark Fitzgibbon contended in a note.
On the fundamentals front, "now is an opportune time to temper our enthusiasm for the stock a bit," given ongoing net interest margin challenges.
Earlier, the Massachusetts-based lender published its second-quarter results that suffered partly from higher funding costs. As such, its NIM on a fully taxable equivalent basis decreased by 37 basis points to 2.26% during the quarter.
"We think near-term headwinds will hold profitability levels below peers and we also think many of these positive attributes are already reflected in the share price," Fitzgibbon said of the company's "strong capital position, capable management team and stellar credit history."
The Neutral rate diverges from the SA Quant system rating of Sell and aligns with the average sell-side analyst rating of Buy.
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Cambridge Bancorp cut to Neutral at Piper after recent rally