Bank Of Ozarks Drops 23%, Analysts Weigh In After Year-Over-Year EPS Decline

Bank Ozk OZK shares plummeted Friday morning after the company reported third-quarter earnings that fell short of market expectations. Several analysts weighed in on the bank stock following the print. Here’s a sampling of what they had to say.

Voices From The Street

Morgan Stanley analyst Ken Zerbe said the company's use of LIBOR as an excuse for a 0.19-percent decline in net interest income doesn’t hold water with him. 

“While the company attributed the lack of benefit to lower LIBOR spreads, it is worth noting that it also received only a small benefit in Q2 when LIBOR was rising much faster than Fed funds,” the analyst said. 

Wells Fargo analyst Timur Braziler said the company’s credit, growth and margins were all a disappointment.

“The $42-million Q3 provision was the largest surprise, as two older-vintage real estate specialties group loans were placed on nonaccrual status and $45.5 million was charged off,” the analyst said. 

Raymond James analyst Michael Rose downgraded Bank of Ozarks and said he has had enough of the deterioration in the company’s Real Estate Specialties Group portfolio.

“While cognizant we are downgrading at/near the bottom given the expected fallout in OZK shares tomorrow, we struggle to identify catalysts to drive outperformance,” the analyst said in a note issued early Friday morning. 

Nate Tobik, founder of Completebankdata.com, told Benzinga’s PreMarket Prep hosts Friday that Bank of Ozarks has been his favorite short idea for about a year now.

“I think it’s going to be a zero once we hit a recession, and you can ride it all the way down,” he said. 

Bank of Ozarks shares were down 23.62 percent at $26.62 at the time of publication Friday. 

Ratings And Price Targets

• Morgan Stanley has an Overweight rating on Bank of Ozarks with a $52 price target.
• Wells Fargo has a Market Perform rating and $40 target.
• Raymond James has a Market Perform rating.

Related Links:

Barclays On Bank Ozk: New Name, New Bearish Stance

A Concerning Weakness In Bank Stocks

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