2024-09-04 08:33:06 ET
Summary
- After a 29.1% stock rise, I am downgrading Simmons First National stock from a 'buy' to a 'sell' due to deteriorating financials.
- Declining deposits, rising debt, and reduced net interest income signal financial weakness.
- The bank's high price-to-earnings multiple and poor asset quality make it less attractive compared to peers.
- Given these factors, I expect Simmons First National to underperform the broader market moving forward.
I never enjoy downgrading a business. But when that comes after a nice run higher, it's not all that bad. As an example, we need to only look at Simmons First National ( SFNC ), a bank that I wrote about in an article published in September 2023. For those not familiar with the company, it is a financial institution based out of Arkansas, with operations not only there, but also throughout Texas, Oklahoma, Missouri, and Tennessee. In that article, I said that shares were cheap and worth considering. This led me to rate the company a ‘buy’....
Read the full article on Seeking Alpha
For further details see:
Simmons First National: A Big Step Back After A Solid Run (Rating Downgrade)
