RM - Regional Management downgraded to Market Perform at BMO on valuation

monsitj/iStock via Getty Images Regional Management (RM) stock drops 3.0% after BMO Capital Markets analyst James Fotheringham downgrades RM to Market Perform from Outperform rating on valuation exclusively. RM shares are currently trading sub $50 and Fotheringham's price target is $43, implying further downside potential. The price target is based on 1.1x pro-forma tangible common equity (product of 16% normalized RoTCE and 7x historical P/E) plus $15 per share excess capital (valued at 0.5x). Its operational performance remains strong but BMO doesn't expect further outperformance due to current price multiples sitting above their historical averages after they tripled in the past year. RM has a PE ratio of 9.81 and a price/sales ratio of 1.52. Regional Management's market perform rating compares with the Bullish Wall Street rating (1 Very Bullish, 1 Bullish, 4 Neutral, 0 Bearish, O Very Bearish) and the Very Bullish Quant rating. See why SA contributor Vince Martin says Regional Management

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Regional Management downgraded to Market Perform at BMO on valuation