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July 1, 2022, 7:43 a.m. EDT

JPMorgan Chase downgrades three regional banks

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By Steve Gelsi

JPMorgan Chase & Co. analysts on Friday downgraded three regional bank stocks and said they're moving their outlook for the sector to neutral based on rising expectations of a recession as well as more aggressive interest rate hikes from the U.S. Federal Reserve. JPMorgan cut its ratings on Live Oak Bancshares Inc. /zigman2/quotes/210554956/composite LOB +8.56% and Huntington Bancshares Inc. /zigman2/quotes/209314988/composite HBAN +0.60% to neutral from overweight and downgraded HBT Financial Inc. /zigman2/quotes/214508433/composite HBT -0.82% to underweight from neutral. "On LOB, while our call on the stock has been to buy at the point of maximum pessimism, with the Fed now adopting a much more hawkish posture, we now believe this point remains on the road ahead rather than in the rear-view mirror," JPMorgan analysts said. "For HBAN and HBT, despite both companies having peer-leading [customer loyalty], they have yet to translate this premium experience into stronger top- and bottom-line growth versus peers." Analysts said they are neutral on regional banks, partly because bank stock valuations are already discounting a 50% probability of a recession and inflation could ease back. Analysts spotlighted First Republic Bank /zigman2/quotes/200683073/composite FRC +1.61% , Signature Bank /zigman2/quotes/204403715/composite SBNY +1.54% , SVB Financial Group /zigman2/quotes/200548254/composite SIVB +2.31% , Silvergate Capital Corp. /zigman2/quotes/214908078/composite SI -3.76% and Cullen/Frost Bankers Inc. /zigman2/quotes/205933704/composite CFR -3.56% as their top picks in the sector. The KBW Bank Index is down 23.6% in 2022, compared to a drop of 20.6% by the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.25% .

/zigman2/quotes/210554956/composite
US : U.S.: NYSE
$ 33.09
+2.61 +8.56%
Volume: 810,471
Jan. 27, 2023 4:00p
P/E Ratio
8.44
Dividend Yield
0.36%
Market Cap
$1.46 billion
Rev. per Employee
$657,490
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/zigman2/quotes/209314988/composite
US : U.S.: Nasdaq
$ 15.01
+0.09 +0.60%
Volume: 11.92M
Jan. 27, 2023 4:00p
P/E Ratio
10.35
Dividend Yield
4.13%
Market Cap
$21.66 billion
Rev. per Employee
N/A
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/zigman2/quotes/214508433/composite
US : U.S.: Nasdaq
$ 20.50
-0.17 -0.82%
Volume: 52,014
Jan. 27, 2023 4:00p
P/E Ratio
9.81
Dividend Yield
3.32%
Market Cap
$589.43 million
Rev. per Employee
$257,927
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/zigman2/quotes/200683073/composite
US : U.S.: NYSE
$ 141.01
+2.24 +1.61%
Volume: 892,732
Jan. 27, 2023 4:04p
P/E Ratio
17.07
Dividend Yield
0.77%
Market Cap
$25.33 billion
Rev. per Employee
$1.07M
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/zigman2/quotes/204403715/composite
US : U.S.: Nasdaq
$ 127.39
+1.93 +1.54%
Volume: 1.25M
Jan. 27, 2023 4:00p
P/E Ratio
6.13
Dividend Yield
2.20%
Market Cap
$8.02 billion
Rev. per Employee
$2.00M
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/zigman2/quotes/200548254/composite
US : U.S.: Nasdaq
$ 302.44
+6.82 +2.31%
Volume: 664,906
Jan. 27, 2023 4:00p
P/E Ratio
11.93
Dividend Yield
N/A
Market Cap
$17.88 billion
Rev. per Employee
$1.10M
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/zigman2/quotes/214908078/composite
US : U.S.: NYSE
$ 13.58
-0.53 -3.76%
Volume: 9.75M
Jan. 27, 2023 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$429.92 million
Rev. per Employee
N/A
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/zigman2/quotes/205933704/composite
US : U.S.: NYSE
$ 127.45
-4.71 -3.56%
Volume: 820,648
Jan. 27, 2023 4:00p
P/E Ratio
14.49
Dividend Yield
2.73%
Market Cap
$8.19 billion
Rev. per Employee
$372,524
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/zigman2/quotes/210599714/realtime
US : S&P US
4,070.56
+10.13 +0.25%
Volume: 0.00
Jan. 27, 2023 5:10p
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