SVB Financial Group
were rising sharply on Friday after Wall Street found positive results in banks’ mixed financial reports.
Ally’s (ticker: ALLY) fourth-quarter earnings and net income beat analyst estimates.
RBC Capital Markets analyst Jon Arfstrom maintained his outperform rating for the digital bank’s shares.
“Going into the quarter, we expected modest margin pressure and deposit costs, but overall performance was slightly better than anticipated,” Arfstrom wrote, noting an increase in deposit balances and “better book pricing.” of loans”.
“Overall, we think the core trends in the business look acceptable in a hostile credit and margin environment for the company,” he added.
SVB Financial’s fourth-quarter earnings missed analysts’ estimates, but net interest income of $1.04 billion was up from $939 million a year earlier.
Raymond James analyst David Long maintained his outperform rating for SVB shares (ticker: SIVB). He praised strong loan growth and reserve building, while acknowledging challenges in private equity and venture capital investment trends, which are leading to a continued decline in client funds.
“On net, we continue to believe that SVB’s unique franchise, low-risk loan portfolio and excellent long-term growth profile merit a steeper premium valuation,” Long wrote.
RBC’s Arfstrom also maintained his outperform rating on SVB, but slightly cut his price target from $302 to $300.
Arfstrom said market volatility and a rebound in customer spending added to equity losses, weighing on quarterly results. He sees the headwinds continuing into 2023, but said “there are signs that trends may improve as we move through the year.”
Ally shares soared 17.7% to $30.83 on Friday. SVB jumped 14.6% to $286.53.
Write to Emily Dattilo at firstname.lastname@example.org