NYCB Stock: Analyst Reiterates Strong Buy Rating, Expects Rosier Future

JP Morgan's Steven Alexopoulos lowered their price target on New York Community Bancorp (NYSE: NYCB) by 17.9% from $14 to $11.5 on 2024/02/01. The analyst maintained their Strong Buy rating on the stock.

According to Alexopoulos, the 45% selloff in NYCB's stock following the release of its Q4 and FY 2023 earnings was overdone, and the stock is "poised to rebound materially." The analyst highlighted management's announcement of several strategic actions aimed at strengthening reserve levels, liquidity, and capital, as the company moves toward becoming a Category 4 bank.

Despite a noticeable decline in earnings projected for 2024, Alexopoulos believes that as the year progresses and 2025 comes into view, a more positive outlook will emerge. This optimism supports their reiterated Strong Buy rating.

New York Community Bancorp reported a loss per share of $0.27 for Q4 2023, missing both the Zacks Consensus Estimate of $0.29 EPS and the $0.25 EPS recorded in Q4 2022 by 200%. However, the company's revenue of $886 million exceeded Q4 2022's $577 million by 53.6%.

For the full year of 2023, NYCB reported an EPS of $0.80, a 35% decrease from the previous year. However, its revenue of $5.7 billion surpassed FY 2022's $1.6 billion by an impressive 252%.

Management provided guidance for net interest income in the range of $2.8 billion to $2.9 billion. President and CEO Thomas R. Cangemi expressed confidence in the company's trajectory, highlighting its successful transformation into a dynamic, full-service commercial bank. Cangemi also mentioned the integration of Flagstar Bank and the upcoming re-branding campaign, set to launch after the planned systems conversion in mid-2024.

On the same day as Alexopoulos' rating update, other analysts also adjusted their views on NYCB. Jefferies' Casey Haire lowered their price target by 46.2% from $13 to $7 and downgraded their rating on the stock from Strong Buy to Hold. RBC Capital's Steven Duong followed a similar path, lowering their price target from $13 to $7 and downgrading their rating to Hold.

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

The consensus forecast among analysts suggests that NYCB's upcoming year will yield earnings per share (EPS) of $1.5. If this projection holds true, NYCB's next yearly EPS will experience a 62.5% decline compared to the previous year.

Since NYCB's quarterly report on January 31, 2024, the stock price has decreased by 6.6%. Year-over-year, the stock has declined by 42%, underperforming the S&P 500, which has experienced an 18.6% decrease during the same period.

It is worth noting that Steven Alexopoulos, the JP Morgan analyst, ranks in the bottom 3% out of 4,463 Wall Street analysts according to WallStreetZen. They hold an average return of -10.1% and a win rate of 45.5%. Alexopoulos specializes in the Financial Services sector.

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

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