New York Community Bancorp Downgraded by RBC Capital Following Disappointing Q4 Results

RBC Capital's Steven Duong downgraded their rating on New York Community Bancorp (NYSE: NYCB) from Buy to Hold on 2024/02/01. The analyst also lowered their price target by 46.2% from $13 to $7.

According to Duong, the bank's fourth quarter results contained several negative surprises, including a higher-than-expected reserve build and provision, a lower margin and guidance, and a dividend cut announcement. Duong attributed these trends to the company crossing the $100 billion asset mark and heading towards becoming a Category IV bank, which has resulted in increased liquidity and compliance needs.

In the fourth quarter of 2023, New York Community Bancorp reported a loss per share of $0.27, missing the Zacks Consensus Estimate of $0.29 and the previous year's EPS of $0.25 by 200%. However, the revenue of $886 million exceeded the Zacks Consensus Estimate of $935.8 million and was 53.6% higher than the revenue in the fourth quarter of 2022.

For the full year 2023, the bank reported an EPS of $0.80, which was 35% lower than the previous year's EPS of $1.23. However, the revenue of $5.7 billion surpassed the previous year's revenue of $1.6 billion by an impressive 252%.

Management guided a net interest income of $2.8 billion to $2.9 billion. President & CEO Thomas R. Cangemi expressed confidence in the bank's transformation, stating that they have successfully grown into a $50 billion+ bank in 2018 and believe their current actions will pave the way for a successful transition to a $100 billion+ bank.

Following Duong's downgrade on February 1st, other analysts also adjusted their ratings and price targets for New York Community Bancorp. JP Morgan's Steven Alexopoulos lowered their price target by 17.9% from $14 to $11.5 but maintained their Strong Buy rating on the stock. Jefferies's Casey Haire, on the other hand, downgraded their rating from Strong Buy to Hold and reduced their price target by 46.2% from $13 to $7.

Currently, 20% of the top-rated analysts rate NYCB as either a Strong Buy or Buy, while 80% see it as a Hold. No analysts recommend or strongly recommend selling the stock.

The consensus forecast among analysts is that NYCB's upcoming year will deliver earnings per share (EPS) of $1.5. If the analysts are correct, NYCB's next yearly EPS will be down by 62.5% compared to the previous year.

Since the release of New York Community Bancorp's latest quarterly report on January 31st, the stock price has declined by 6.6%. Year-over-year, the stock is down 42%. During the same period, NYCB has underperformed the S&P 500, which has experienced an 18.6% decline.

RBC Capital analyst Steven Duong, who downgraded NYCB, is ranked by WallStreetZen in the top 26% out of 4,463 Wall Street analysts. With an average return of 16.6% and a win rate of 41.7%, Duong specializes in the Financial Services sector.

New York Community Bancorp, Inc. is the holding company for New York Community Bank and offers deposit products and loans in Metro New York, New Jersey, Ohio, Florida, and Arizona. In addition, the company provides annuities, life and long-term care insurance, and mutual funds. Established in 1859, New York Community Bancorp is headquartered in Hicksville, NY.

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