Zacks Investment Research downgraded shares of Synovus Financial Corporation (SNV) from OUTPERFORM to NEUTRAL on March 28, 2014, with a target price of $3.50.
We have downgraded our long-term recommendation on Synovus to Neutral based on a slump in its top-line in fourth-quarter 2013. Moreover, earnings were in line with the Zacks Consensus Estimate. Decline in mortgage banking and net interest income was on the downside. However, lower expenses and significant improvement in credit quality were the tailwinds for the quarter. We believe Synovus has commendably recovered from the financial crunch as reflected from lower non-performing assets and improving operating efficiencies. Moreover, repayment of Troubled Asset Relief Program (TARP) dues depicts sustainable earnings in the upcoming quarters. However, regulatory issues, low interest environment and absence of credible improvement in the mortgage market remain matters of concern.
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