DA Davidson analyst Peter Winter downgraded Prosperity Bancshares to Neutral from Buy with a price target of $78, down from $80. The firm notes that its 2025 margin forecast of 3.13% is below consensus of 3.20%, driving a below consensus 2025 EPS forecast of of $5.65. The firm notes it had previously upgraded Prosperity to Buy in Mid-March last year following three bank failures as a “flight to quality” name, citing its strong deposit franchise and net interest margin in a higher for longer rate environment. However, those strengths will likely be minimized as the market shifts to risk-on credit names and banks with greater ability to lower deposit costs, the analyst tells investors.
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