Flagstar Financial (FLG, Financial) has seen its price target revised upward by Morgan Stanley from $12 to $13, while maintaining an Equal Weight rating. Analyst Manan Gosalia highlighted the bank's successful strategies in expanding its commercial banking segment as a key reason for the update. Looking ahead, Flagstar's plans to increase hiring throughout the year further bolster the firm's confidence in the bank's commercial and industrial loan growth prospects.
With these developments, Morgan Stanley is optimistic about Flagstar's earnings potential and has adjusted its earnings per share (EPS) expectations for the years 2026 and 2027. This reflects a stronger outlook than previously anticipated following the latest earnings report. As Flagstar continues its initiatives, stakeholders are closely watching how these strategies will impact the bank's overall performance.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 14 analysts, the average target price for Flagstar Financial Inc (FLG, Financial) is $12.38 with a high estimate of $14.00 and a low estimate of $10.50. The average target implies an upside of 5.50% from the current price of $11.73. More detailed estimate data can be found on the Flagstar Financial Inc (FLG) Forecast page.
Based on the consensus recommendation from 16 brokerage firms, Flagstar Financial Inc's (FLG, Financial) average brokerage recommendation is currently 2.8, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Flagstar Financial Inc (FLG, Financial) in one year is $15.79, suggesting a upside of 34.61% from the current price of $11.73. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Flagstar Financial Inc (FLG) Summary page.
FLG Key Business Developments
Release Date: April 25, 2025
- Adjusted Net Loss per Share: $0.23 per diluted share, better than the consensus of $0.27 and $0.17 better than the previous quarter.
- CET1 Capital Ratio: Approximately 12%, among the strongest in the regional banking industry.
- Non-Interest Expenses: Declined by $71 million quarter-over-quarter, excluding one-time charges.
- C&I Loan Commitments: Over $1 billion in the quarter, with $769 million in originations, up over 40% from the previous quarter.
- Weighted Average Cost of Deposits: Declined by 34 basis points in Q1 compared to Q4.
- Brokered Deposits Reduction: Paid off approximately $1.9 billion during the quarter.
- Net Charge-Offs: Declined by 48% to $115 million quarter-over-quarter.
- Liquidity Position: Totaling $30 billion, representing 231% of uninsured deposits.
- Criticized Loans: Declined by almost $900 million or 6% quarter-over-quarter.
- CRE Portfolio Payoffs: Totaled $840 million, with 80% in the Multi-Family portfolio.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Flagstar Financial Inc (FLG, Financial) reported a first-quarter adjusted net loss of $0.23 per diluted share, which was better than the consensus estimate of $0.27.
- The company made significant progress in building out its Commercial Lending business, with over $1 billion in C&I loan commitments and $769 million in originations, marking a 40% increase from the previous quarter.
- Flagstar Financial Inc (FLG) successfully reduced brokered deposits by $1.9 billion and FHLB advances by $250 million, improving its liquidity profile.
- The company achieved a CET1 capital ratio of approximately 12%, positioning it as one of the strongest in the regional banking industry.
- Flagstar Financial Inc (FLG) is on track to achieve its cost reduction goals, with non-interest expenses declining by $71 million quarter-over-quarter, and aims to reduce expenses by over $600 million year-over-year.
Negative Points
- Flagstar Financial Inc (FLG) reported a net loss available to common stockholders of $0.26 per diluted share on a GAAP basis.
- The company faced challenges with a significant borrower moving to non-accrual status, impacting the quarter's results by approximately $33 million.
- Despite improvements, the overall C&I loan portfolio declined due to runoff in non-core areas, masking progress in new focus areas.
- The company's net interest margin (NIM) remains under pressure, with a reported NIM of 1.74% for the quarter, requiring significant improvement to meet year-end targets.
- Flagstar Financial Inc (FLG) continues to face challenges in reducing its CRE concentration, with ongoing efforts needed to manage and reduce exposure in this area.
