M&T Bank upgraded to Outperform at Evercore as CRE pressures ease
Evercore has upgraded M&T Bank (NYSE:MTB) to Outperform from In Line, citing easing commercial real estate (CRE) credit concerns and improving fundamentals. The Federal Reserve's recent rate cut is expected to alleviate CRE pressures, enhancing M&T's earnings resilience. Analyst John Pancari anticipates an acceleration in stock buybacks and notes that while CRE concerns remain, declining rates will aid refinancing and credit migration. M&T's stock is currently trading at 10.7x 2025 EPS estimate, with a favorable earnings outlook compared to peers, aligning with the average Wall Street rating of Buy.
Evercore upgraded M&T Bank (NYSE:MTB) to Outperform from In Line as commercial real estate ("CRE") credit concerns abate, fundamentals improve, and the bank resumes stock buybacks.
The Federal Reserve's recent rate cut helps to reduce pressure from CRE. "We also believe MTB’s earnings could prove more resilient than expected helped by fixed asset repricing, funding flexibility, and EA [earning assets] upside," analyst John Pancari wrote in a note to clients.
"While CRE credit concerns persist, the pace of decline in rates bodes well for the ability to refinance, while also benefiting credit migration, and helping limit loss content," he added.
Furthermore, he expects the pace of M&T Bank's (MTB) stock repurchases to accelerate.
While the stock has outperformed year-to-date, it's still trading in line with its peers at 10.7x 2025 EPS estimate and at 1.7x tangible book value but has a "modestly above peer" return on tangible common equity outlook and "a more favorable earnings trajectory."
Pancari's Outperform rating on M&T Bank (MTB) aligns with the SA Quant rating and the average Wall Street rating, both at Buy.