Shares of Marshall & Ilsley Corp. of Milwaukee jumped 3.9% on Wednesday after upgrades from Prudential Equity Group LLC and A.G. Edwards & Sons Inc.
David A. George of A.G. Edwards raised his rating from “hold” to “buy,” anticipating a solid third-quarter earnings report. “Recent price weakness has resulted in a good buying opportunity in this high-quality regional bank,” he wrote.
Prudential’s Michael L. Mayo was less enthusiastic. His upgrade was from “underweight” to “neutral weight,” and he wrote that he is “less negative” about the M&I. “We still do not recommend the stock as “overweight,” given concerns about the growth in the footprint,” he wrote, but “the downside now appears limited.”
M&T Bank Corp. shares rose 2.8% in the morning and closed up 0.4%. The Buffalo company reported third-quarter earnings of $1.64 a share, 8 cents more than a year earlier; net income of $191 million was up 2%. Earnings were reduced by 16 cents a share by the writedown of Freddie Mac and Fannie Mae securities, which was partially offset by a tax gain.
Shares of Washington Mutual Inc. fell 1.6% after Goldman Sachs Group Inc. initiated coverage with an “in-line” rating. “Though we are impressed by Washington Mutual’s recently rejuvenated profitability, we see few secular catalysts that can drive meaningful earnings growth against cyclical industry headwinds in 2006-07,” Goldman’s Michael S. Hodes wrote.
The American Banker index of 225 banking stocks fell 0.5% on Wednesday, and the Standard & Poor’s 500 fell 0.61%.
Gainers included Omega Financial Corp. of State College, Pa. (up 2.8%); National Penn Bancshares Inc. of Boyertown, Pa. (2.3%); and Commerce Bancorp Inc. of Cherry Hill, N.J. (1.9%).
Decliners included Capitol Bancorp Ltd. of Lansing, Mich. (down 5.1%); Fremont General Corp. of Santa Monica, Calif. (4.3%); and New Century Financial Corp. of Irvine, Calif. (4.1%).
