CBU - Community Bank System's stock climbs after Raymond James rating upgrade
2023-06-06 11:11:36 ET
- Community Bank System's ( NYSE: CBU ) stock gained 7.6% in Tuesday trading after Raymond James upgraded the Dewitt, New York-based bank holding company to Outperform from Market Perform, reflecting its strong fee income and low cost base.
- The bank's cash flows "should support continued strong profitability relative to industry returns, which are under substantial pressure," Raymond James analyst Steve Moss wrote in a note to clients.
- CBU's fee income businesses — Employee Benefits Services, Wealth, and Insurance — "represent 37% of revenue, generate significant capital, and support CBU's premium valuation relative to the industry," he said.
- In addition, he expects Community Bank System's ( CBU ) core deposit base to outperform most banks due to its granular deposit base and rural markets. Maturing treasuries and loan proceeds should also support relative net interest margin outperformance and high teens return on tangible common equity, he noted.
- His Outperform rating contrasts with the SA Quant rating and the average Wall Street rating , both at Hold.
- SA analyst Sheen Bay Research sees its recent sale and paydown of wholesale borrowing lifting the bank's margin.
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Community Bank System's stock climbs after Raymond James rating upgrade