UMPQ - Umpqua -5.4% as JPMorgan downgrades on unsustainable mortgage lending

Umpqua Holdings (UMPQ) shares slide 5.4% after JPMorgan analyst Steven Alexopoulos downgrades the bank to Underweight.Q3 beat on a reserve release and surge in mortgage lending aren't likely sustainable at those levels, the analyst wrote in a note to clients."As the tailwind from mortgage fades over time and is eventually replaced with a headwind the company is likely to see outsized downward pressure on PTPP (pretax pre-provision) income."Even with meaningful benefits from Umpqua's Next Gen 2.0 efficiency initiative, Alexopoulos estimates PTPP income will decline in the 10% range in 2021 and in 2022.Alexopoulos's Underweight rating takes an even more negative view than the Quant rating of Neutral; and diverges even more from the average Wall Street analyst rating of Bullish (4 Very Bullish, 1 Bullish, 3 Neutral).See how UMPQ's Quant factor grades stack up against its peers: Previously: Umpqua Holdings EPS beats by $0.22, beats on revenue (Oct. 21)

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Umpqua -5.4% as JPMorgan downgrades on unsustainable mortgage lending