Citing the opportunity from recent stock price weakness and expectations loan and lease growth and buybacks will offset margin compression, Buckingham Research upgrades CIT Group to a Buy with $54 price target.
On the earnings call, Evercore's Brad Ball notes CIT's 16.7% capital ratio means about $2B of excess capital and wonders when it might be returned. CFO Scott Parker responds that management is pleased with the two buybacks and dividend executed in the past six months and is mindful of "industry guidelines ... we are definitely focused on our capital ratios and getting down to our target capital ratios as we move forward."
As to the timing of the reversal of the DTA allowance, Parker says the company must have 3 years of cumulative, normalized book taxable income before determining whether this can take place. Management is being too conservative about this, says BTIG's Mark Palmer, a bull on the stock.