Wedbush upgrades HomeStreet on potential for another suitor

Wedbush upgraded HomeStreet (HMST) to Outperform from Neutral with an unchanged price target of $12. The shares sold off heavily last week after it was announced that FirstSun Capital’s (FSUN) pending offer for HomeStreet was facing regulatory headwinds, the analyst tells investors in a research note. The firm believes the FirstSun deal will be called off, but says the regulators apparently had more issue with the acquiring company than the target, as HomeStreet included in its press release that the regulators have no direct concerns with the standalone HomeStreet entity. Wedbush believes this could open the door for another suitor to potentially acquire HomeStreet at potentially a similar valuation. Even if a new deal were to not occur, HomeStreet is trading at a significant discount to peers, the firm adds.