Flagstar weakness ‘seems overdone’ on Mamdani worries, says DA Davidson

DA Davidson notes that Flagstar Financial (FLG) shares are down 12% in the last two weeks as Zohran Mamdani was closing the gap on Andrew Cuomo in the running for New York City mayor and won the Democratic mayoral primary. One campaign promise was to “freeze rents” on rent regulated apartments and while there is “no guarantee” he becomes New York’s next mayor when the election is held on November 4, if he does win it would be a negative for Flagstar, the analyst tells investors. The biggest risk is Flagstar might have to increase reserves, adds the analyst, who believes the recent selloff is “overdone” and reiterates a Buy rating and $14.50 price target on the bank’s shares.