In a report published Tuesday, D.A. Davidson & Co. analyst Stephen Geyen initiated coverage on QCR holdings, Inc. QCRH with a Buy rating and $21.00 target.
According to the report, “QCRH shares trade at a significant discount based on estimated 2015 EPS versus SNL Small-Cap peers. As the bank builds its TCE ratio up toward a 6% level (currently 3.5%) over the next couple of years, we think this discount to the peer group will diminish. We believe the shares offer a very compelling upside for the value investor with a long-term investment horizon as management remains committed to building capital internally given the current share discount.”
Some key points from the report include:
- "QCR Holdings’ TCE ratio of 3.5% is well below the peer bank median of 8.5% and investor concern over a capital raise has weighed on the shares.”
- "Over the past decade, QCR Holdings’ reported loss rate has been, on average, 37% below the peer group. In 3Q, the NPLs/loans ratio was 1.62% vs. the peer median of 1.69%”
- "As QCRH continues to grow its capital, we believe the discount to peers will diminish.”
QCRH closed Monday at $17.13.
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