Rating Changes by Credit Suisse; East West Bancorp Neutral, Campbell Soup Company Neutral

In a research report published today, Credit Suisse made a couple of rating changes. East West Bancorp EWBC was downgraded from Outperform to Neutral. Credit Suisse elaborated its decision with: "Despite our longer-term belief that EWBC's Chinese-American niche will provide for healthy loan growth, we believe the EWBC stock's near-term prospects are more muted due to (1) increasing margin pressure (both new/refinanced loans and higher margin covered loan runoff), (2) a lack of CRE demand (EWBC's core loan segment), partially offset by (3) the prospect of excess liquidity (estimated at $500mm) eventually being deployed into securities, and (4) the likelihood for further cover loan credit improvement (80 / 20% upside share with the FDIC)." Credit Suisse also lowered its price target on East West Bancorp from $22 to $21. Campbell Soup Company CPB was upgraded from Underperform to Neutral. In the report, Credit Suisse states, "We are raising our rating on Campbell to Neutral from Underperform because management's constructive comments about its strategy for soup have eased our concerns about the competitive intensity in the category. In addition, we believe that investors' concerns about an earnings "re-base" in fiscal 2012 are generally overdone. We are raising our target price to $35 from $32 based on a 14x P/E against our calendar 2012 EPS estimate of $2.50. For fiscal 2012, we expect EPS of $2.45 (old: $2.44) based on a 16.0% EBIT margin against flat sales. Our fiscal 2013 EPS estimate is also raised to $2.65 from $2.65 from $2.64." On Monday, Campbell lost 0.82% to close the day at $34.95, while East West Bancorp lost 2.77% and is trading at $19.66.