2023-04-05 08:54:29 ET
First Citizens BancShares ( NASDAQ: FCNCA ) shares drifted up 1.1% in Wednesday premarket trading after UBS double upgraded the stock to Buy from Sell on the basis of its recent acquisition of failed lender Silicon Valley Bank ( OTC:SIVBQ ).
"We view the balance sheet as more well positioned to handle a recession going forward given the low loss nature of the SIVB loan portfolio, which should result in a higher quality earnings stream," the firm wrote in a note to clients.
UBS arrived at a base case for +115% tangible book value per share accretion to around $1,232 pro forma at the last quarter of 2022, while noting "the low-end of the range could be limited to ~$1,085 when applying more aggressive assumptions on rate/credit/CDI Marks and higher 1x costs."
The upbeat coverage comes after FCNCA was featured as l ast week's biggest winner among financial stocks by a wide margin, surging 67%. Seeking Alpha contributor Juxtaposed Ideas, though, viewed the FCNCA with a Hold rating as it nears fair value.
UBS' Buy rating disagrees with the Quant system rating of Hold and aligns with the average Wall Street analyst rating.
More on the Bank Crisis
- First Citizens BancShares Still Has Room To Run After 50% Gain
- First Citizens: Additional Credit Risk Might Force Its Stock Price Back Down
- First Citizens BancShares Wins The Lottery With Acquisition Of Silicon Valley Bank
- First Citizens: Panic Sellers Likely Regretted Fleeing At The Lows
For further details see:
First Citizens double upgraded to Buy at UBS due to SVB takeover