Cullen/Frost Bankers (CFR) Downgraded to “Sell” at Zacks Investment Research

Zacks Investment Research lowered shares of Cullen/Frost Bankers (NYSE:CFR) from a hold rating to a sell rating in a report published on Wednesday morning.

According to Zacks, “Shares of Cullen/Frost have outperformed the industry over the past three months. Further, the company possesses an impressive earnings surprise history, beating the Zacks Consensus Estimate in all the trailing four quarters. The company’s fourth-quarter results reflected top-line strength, aided by rising loans and deposits, along with lower provisions. However, high expenses and lower fee income were major drags. With a rising interest-rate environment and improving non-interest bearing deposits, the company's net interest income and net interest margin are likely to grow. The company's strong liquidity position keeps it well poised for opportunistic expansions. Nevertheless, the company’s significant exposure to real estate in its loan portfolio and rising costs, mainly resulting from expanding franchise, are likely to deter bottom-line growth.”

A number of other research analysts have also recently commented on the stock. Stephens set a $101.00 price target on shares of Cullen/Frost Bankers and gave the stock a hold rating in a report on Monday, October 29th. ValuEngine lowered shares of Cullen/Frost Bankers from a hold rating to a sell rating in a research note on Friday, October 26th. Bank of America lowered shares of Cullen/Frost Bankers from a buy rating to a neutral rating and set a $96.00 price objective for the company. in a research note on Thursday, January 10th. Morgan Stanley lowered shares of Cullen/Frost Bankers from an equal rating to a weight rating and lowered their price objective for the stock from $105.00 to $103.00 in a research note on Monday, November 12th. Finally, Barclays reaffirmed a hold rating and issued a $105.00 price objective on shares of Cullen/Frost Bankers in a research note on Friday, January 11th. Five research analysts have rated the stock with a sell rating, five have given a hold rating and two have given a buy rating to the stock. Cullen/Frost Bankers currently has an average rating of Hold and a consensus price target of $107.11.

Shares of NYSE CFR traded up $0.33 during mid-day trading on Wednesday, reaching $99.63. The company had a trading volume of 6,498 shares, compared to its average volume of 320,692. The company has a current ratio of 0.63, a quick ratio of 0.63 and a debt-to-equity ratio of 0.07. The stock has a market cap of $6.38 billion, a PE ratio of 14.44, a PEG ratio of 1.48 and a beta of 1.36. Cullen/Frost Bankers has a 52 week low of $81.87 and a 52 week high of $121.66.

Cullen/Frost Bankers (NYSE:CFR) last posted its quarterly earnings results on Thursday, January 31st. The bank reported $1.82 EPS for the quarter, topping the Zacks’ consensus estimate of $1.75 by $0.07. The firm had revenue of $360.93 million for the quarter, compared to analysts’ expectations of $344.18 million. Cullen/Frost Bankers had a net margin of 32.11% and a return on equity of 14.48%. As a group, sell-side analysts forecast that Cullen/Frost Bankers will post 7.12 earnings per share for the current year.

The company also recently declared a quarterly dividend, which will be paid on Friday, March 15th. Shareholders of record on Thursday, February 28th will be given a dividend of $0.67 per share. This represents a $2.68 annualized dividend and a dividend yield of 2.69%. The ex-dividend date of this dividend is Wednesday, February 27th. Cullen/Frost Bankers’s payout ratio is 38.84%.

In related news, Director Cynthia Jane Comparin acquired 1,000 shares of the business’s stock in a transaction dated Friday, December 14th. The shares were purchased at an average price of $93.38 per share, for a total transaction of $93,380.00. Following the completion of the acquisition, the director now directly owns 1,000 shares in the company, valued at approximately $93,380. The transaction was disclosed in a document filed with the SEC, which is available through this link. Also, insider Bobby Berman sold 1,391 shares of the company’s stock in a transaction dated Monday, November 19th. The shares were sold at an average price of $101.12, for a total transaction of $140,657.92. Following the transaction, the insider now owns 28,112 shares in the company, valued at approximately $2,842,685.44. The disclosure for this sale can be found here. Corporate insiders own 4.64% of the company’s stock.

Several institutional investors and hedge funds have recently bought and sold shares of the company. Oregon Public Employees Retirement Fund increased its holdings in shares of Cullen/Frost Bankers by 11.2% during the fourth quarter. Oregon Public Employees Retirement Fund now owns 25,578 shares of the bank’s stock valued at $2,249,000 after acquiring an additional 2,578 shares in the last quarter. Comerica Bank increased its holdings in shares of Cullen/Frost Bankers by 1.5% during the fourth quarter. Comerica Bank now owns 47,687 shares of the bank’s stock valued at $4,762,000 after acquiring an additional 689 shares in the last quarter. Canada Pension Plan Investment Board acquired a new position in shares of Cullen/Frost Bankers during the fourth quarter valued at about $88,000. South Dakota Investment Council increased its holdings in shares of Cullen/Frost Bankers by 31.6% during the fourth quarter. South Dakota Investment Council now owns 30,400 shares of the bank’s stock valued at $2,673,000 after acquiring an additional 7,300 shares in the last quarter. Finally, Cullen Frost Bankers Inc. increased its holdings in shares of Cullen/Frost Bankers by 1.2% during the fourth quarter. Cullen Frost Bankers Inc. now owns 274,878 shares of the bank’s stock valued at $24,173,000 after acquiring an additional 3,315 shares in the last quarter. Hedge funds and other institutional investors own 78.46% of the company’s stock.

About Cullen/Frost Bankers

Cullen/Frost Bankers, Inc operates as the holding company for Frost Bank that offers commercial and consumer banking services in Texas. The company operates in two segments, Banking and Frost Wealth Advisors. It provides commercial banking services to corporations and other business clients, including financing for industrial and commercial properties, interim construction, equipment, inventories and accounts receivable, and acquisition financing; commercial leasing; and treasury management services.

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