Zacks Investment Research downgraded shares of SVB Financial Group (SIVB) from OUTPERFORM to NEUTRAL on July 01, 2013, with a target price of $87.00.
We have downgraded our long-term recommendation on SVB Financial to Neutral primarily based on increasing non-interest expenses. However, first-quarter earnings came in marginally ahead of the Zacks Consensus Estimate, primarily driven by top-line growth. Moreover, the company witnessed improving asset quality as well as capital and profitability ratios. Stable growth in loans and deposits was also impressive. This, along with a declining long-term debt, should support its bottom-line growth. Stabilizing capital ratios add further strength to its financials. However, a low interest rate environment, sluggish economic recovery and stringent regulations are expected to slightly dampen the company's profitability in the near term.
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