Hurricane Maria May Have Blown Shares Of Popular Down To An Attractive Level

Shares of Popular Inc BPOP, a financial holding company with exposure to Puerto Rico, has fallen more 15 percent since Sept. 18, but this has created a compelling buying opportunity, according to analysts at Barclays. The firm's Matthew Keating upgraded Popular's stock rating from Equal-Weight to Overweight with a price target boosted from $40 to $44.

Popular's stock has been hard hit from Hurricane Maria concerns while at the same time the regional bank index gained 7 percent, Keating wrote in the upgrade note. But now the company has a "manageable" storm-related reserve build in the third quarter and an economic stimulus package from rebuilding efforts will help boost the stock higher.

For instance, on Oct. 15 only 15 percent of the country's electricity was operational but has now improved to 25 percent. Seventy-five percent of water has now been restored and 89 percent of grocery stores are back open. By Nov. 15 the government expects 50 percent of all power to be restored and 95 percent by the end of the year.

Meanwhile, an estimated $30 billion in insurance payouts, coupled with a portion of the $36.5 billion federal disaster aid package and hundreds of millions of additional dollars from federal agencies could end up being a "catalyst for positive change," the analyst wrote.

Finally, to reflect a favorably revised hurricane reserve build forecast, the company is now expected to earn $2.00 per share in fiscal 2017 (up from $1.42 per share).

At time of publication, shares of Popular were up 4.16 percent at $35.58.

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