OceanFirst downgraded to Market Perform from Strong Buy at Raymond James

Raymond James analyst Daniel Tamayo double downgraded OceanFirst Financial (OCFC) to Market Perform from Strong Buy without a price target following the company’s announcement to acquire Flushing Financial (FFIC). The acquisition increases OceanFirst’s presence in Long Island and Manhattan, leads to higher earnings forecasts, and was done at a at a fair price, the analyst tells investors in a research note. However, the firm expects “significant” dilution and says the deal slows the benefit of OceanFirst’s shift to a stronger core deposit franchise. It also carries risk in maintaining bankers and the ability to lower funding costs in competitive markets, adds Raymond James.