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Two more analysts downgraded New York Community Bancorp (NYSE: NYCB) shares on the heels of its larger-than-expected provision for credit losses in fourth-quarter earnings earlier this week.
Deutsche Bank cut shares from Hold to Buy and Compass Point moved them up recommendation to NYCB of neutral.
“It is a difficult decision given strong selling and low valuations, but also much uncertainty over credit quality, net interest income and resulting earnings,” Deutsche Bank analyst Bernard von-Gizycki wrote in a note to clients.
At Compass Point, analyst Dave Rochester describes the balance of risk. According to him, “the potential significant share price upside implied by his target reflects a higher degree of risk.” However, there is potential downside risk for stocks if there is further significant credit deterioration.
Rochester said he could be more constructive on the stock if he had more comfort and/or visibility on profitability prospects and management’s ability to navigate a tougher regulatory environment.
New York Community Bancorp (NYCB) increased by 5.3% in Friday morning trading after the stock plunged 45% in Wednesday and Thursday sessions after reporting a dividend cut and fourth-quarter earnings on Wednesday.
Both Compass Point and Deutsche Bank’s ratings on NYCB are in line with the SA Quant rating of Hold. Wall Street’s average rating is still Buy.