Morgan Stanley analyst Manan Gosalia maintained a Hold rating on Merchants Bancorp today and set a price target of $34.00.
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Manan Gosalia has given his Hold rating due to a combination of factors impacting Merchants Bancorp. The company’s recent financial performance was notably affected by higher-than-expected loan losses, primarily driven by issues related to mortgage fraud. This resulted in a significant increase in loan loss provisions and charge-offs, which overshadowed the otherwise strong performance in fees and loans for the quarter.
Despite some positive trends, such as a decline in loans classified as special mention and overall delinquencies, there remains uncertainty about the full extent of the mortgage fraud issue. The ongoing investigation and the need for more clarity on the resolution of these losses suggest that the stock may continue to face pressure. Therefore, the Hold rating reflects a cautious stance until there is more certainty that the majority of these challenges have been resolved.
According to TipRanks, Gosalia is a 4-star analyst with an average return of 8.4% and a 56.35% success rate. Gosalia covers the Financial sector, focusing on stocks such as Cadence Bank, M&T Bank, and Commerce Bancshares.