SI - DA Davidson upgrades Prosperity Bancshares to Buy due to strong balance sheet

2023-03-13 12:08:23 ET

• D.A. Davidson on Monday upgraded Prosperity Bancshares ( NYSE: PB ) to Buy from Neutral, owing to its strong balance sheet and "pristine" credit trends.
• "Given the increased risks of a deeper recession, PB is a great defensive stock given its low risk balance sheet, strong deposit franchise, and peer leading capital ratios," said analyst Peter Winter.
• "Plus, PB maintains a high level of fixed rate assets that will reprice over the next two years at much higher rates leading to plenty of runway for net interest margin expansion; whereas most peers expect NIMs to peak in H1 2023," he added.
• Winter noted that failures of Silicon Valley Bank ( SIVB ) and Silvergate ( SI ) have no bearing on Prosperity ( PB ).
• D.A. Davidson maintained its $79 price target on Prosperity ( PB ), implying 23.2% potential upside to its last close.
• Shares of Prosperity ( PB ) inched 0.6% higher in midday trade on Monday.
• The research firm's stance contrasts Hold ratings from SA Quant as well as Wall Street analysts .

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