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First Citizens Bancshares double-upgraded at UBS on SVB acquisition benefits

AuthorSam Boughedda
Published 04/05/2023, 01:21 PM
Updated 04/05/2023, 01:25 PM
© Reuters. First Citizens Bancshares (FCNCA) double-upgraded at UBS on SVB acquisition benefits
FCNCA
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By Sam Boughedda

First Citizens BancShares Inc (NASDAQ:FCNCA) hit an all-time high on Wednesday, up more than 4%, after UBS analysts double-upgraded the stock to Buy from Sell, raising the price target to $1,206 from $538 following the announcement of the company's acquisition of SIVB.

The analysts argued that tangible book value per share (TBVPS) accretion should be a positive catalyst for a further re-rate.

The analysts wrote: "We increased our 2024E EPS to $141.36 from $86.01, and our YE2023 tangible book value per share (TBVPS) to ~$1,423 from ~$659 due the acquisition."

"We increased our target P/E and P/ TBV multiples to 8.0x (from 6.0x) and 0.9x (from 0.85x), as 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."

They said UBS believes FCNCA's shares are "well positioned to leg higher from here with 1Q23 earnings, once TBVPS accretion is more well known."

Latest comments

And when FCNCA is invited to replace SVB in the S&P 500 Index. Massive purchases will be necessary. And at a $1200-1400 price point, a stock split could also be in the works.
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