JP Morgan upgrades M&T Bancorp to 'overweight' on improving credit trends

Bancorp

03/09/2024 11:43

** J.P. Morgan upgrades U.S. regional lender M&T Bancorp
 MTB.N  to "overweight" from "neutral", citing improving credit
trends 
    ** Brokerage says it expects outsized credit fears and
worries over declining net interest margins (NIM) to erode over
the next few quarters as the U.S. Fed cuts benchmark rates 
    ** Raises PT on MTB to $215 from $183, an upside of ~25% on
the stock's last close 
    ** "Once the company is able to demonstrate a stable NIM in
the backdrop of reduced short-term rates ... we believe this
will quickly set the stage for bottom-line EPS expectations to
improve" - brokerage 
    ** NIM - a key profitability metric that measures how much a
bank earns as interest on loans and pays out on deposits - has
contracted broadly across the industry YTD amid higher deposit
costs and tepid loan demand 
    ** J.P. Morgan adds there are multiple near-term catalysts
for the stock and that MTB's growth profile is better than peer
banks 
    ** 11 of 23 brokerages rate the stock "buy" or higher, 11
"hold" and one "sell"; their median PT is $182 - LSEG  
    ** As of last close, MTB up ~25% YTD vs a 18.4% gain in the
benchmark S&P 500  .SPX 

 (Reporting by Manya Saini in Bengaluru)
 ((Manya.Saini@thomsonreuters.com))