Analysts at Bank of America Merrill Lynch say newly public Franklin Financial Network can crank out annual loan growth of more than 35 percent both this year and next and set the stage for a 20 percent rise in its shares. Launching coverage of the bank holding company with a 'buy' rating and $27 target, the analysts say "the market is overly discounting execution risk at FSB. We expect the relative valuation gap versus peers to narrow as investors gain confidence in management's ability to deliver on its loan growth targets while improving the return profile."
Franklin Financial shares (Ticker: FSB) have traded in a remarkably narrow range since going public four weeks ago and have not yet closed above their $21 IPO price.
Shares of Franklin Financial Network didn't rise or fall much Thursday on their first day of trading on the New York Stock Exchange. After ticking up a bit from their $21 IPO price in the first 15 minutes of action, the stock (Ticker: FSB) dipped to $20.75 before working its way back up. Interestingly, the $21 level served as a hard cap for traders, who consistently stopped bidding up the stock right at $20.99. Heading into the last half hour of trading, more than 870,000 shares had changed hands.
CEO Richard Herrington outside the New York Stock Exchange this morning. (Photo: NYSE Twitter)
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