As previously reported, DA Davidson upgraded Flagstar Financial (FLG) to Buy from Neutral with a price target of $14.50, up from $12. Management has addressed the bank’s capital issues and the firm is more confident that management has “gotten their arms around the credit issues,” the analyst tells investors. Given the overhaul of the balance sheet and shift in business strategy that is still in the very early stages and unproven, tangible book value is “the more relevant valuation metric” and the stock is currently trading at just 0.64-times TBV, the analyst added.
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