Analyst Manan Gosalia from Morgan Stanley maintained a Hold rating on Flagstar Financial and keeping the price target at $13.00.
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Manan Gosalia has given his Hold rating due to a combination of factors affecting Flagstar Financial. The company has lowered its net interest income (NII) guidance for the years 2025 and 2026, primarily due to higher than expected commercial real estate (CRE) payoffs, which have resulted in a smaller balance sheet than initially anticipated. This reduction in NII is partially offset by lower expenses, but it still impacts the company’s financial outlook.
Additionally, while Flagstar’s credit trends remain positive, the potential for rent freezes poses a risk to the stock until November. The company’s return on tangible common equity (ROTCE) is projected to remain at 10% for 2027, which is below the company’s target range of 12.50-12.75%, further influenced by the lower NII. These factors contribute to a cautious outlook, justifying the Hold rating.
In another report released yesterday, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $11.50 price target.