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Extraction Summary
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People
9
Organizations
1
Locations
1
Events
3
Relationships
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Quotes
Document Information
Type:
Financial conference presentation slide
File Size:
Summary
This document is a single page from a Bank of America Merrill Lynch presentation for the '2016 Future of Financials Conference' held on November 17, 2016. It provides financial analysis and stock price objectives for several banking and financial corporations, including Goldman Sachs, Great Western Bancorp, and others. The document contains no mention of Jeffrey Epstein or any related individuals; its content is strictly financial analysis. The Bates stamp 'HOUSE_OVERSIGHT_014383' in the footer is the only element suggesting it was part of a larger collection of documents submitted to a congressional investigation.
Organizations (9)
| Name | Type | Context |
|---|---|---|
| Bank of America Merrill Lynch |
Author of the financial analysis and host of the conference.
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| Goldman Sachs (GS) |
Subject of financial valuation with a $230 price objective.
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| Great Western Bancorp Inc (GWB) |
Subject of financial valuation with a $42 price objective.
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| Hancock Holding (HBHC) |
Subject of financial valuation with a $41 price objective and a derived $35 PO.
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| Huntington Bancshares Inc. (HBAN) |
Subject of financial valuation with a $13 price objective.
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| IBERIABANK Corp (IBKC) |
Subject of financial valuation with an $85 price objective.
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| Franklin's |
Mentioned in the context of risks related to construction loans and real estate markets. Full company name not provided.
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| FMER |
Mentioned in the context of integration risk for Huntington Bancshares Inc. Full company name not provided.
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| House Oversight |
Inferred from the Bates stamp 'HOUSE_OVERSIGHT_014383', indicating the document was part of evidence or records provi...
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Timeline (1 events)
2016-11-17
2016 Future of Financials Conference, where this analysis was likely presented.
Not specified
Locations (1)
| Location | Context |
|---|---|
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Mentioned in relation to Great Western Bancorp's peer group and potential economic improvement.
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Relationships (3)
Bank of America Merrill Lynch
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Analyst / Analyzed Company
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Goldman Sachs, Great Western Bancorp Inc, Hancock Holding, Huntington Bancshares Inc, IBERIABANK Corp
The document is a financial analysis report by Bank of America Merrill Lynch about the other listed companies.
Great Western Bancorp Inc
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Peer Group
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High performing, Midwest peers, and SMIDs
The document states GWB is compared to a peer group for valuation purposes.
Hancock Holding
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Peer Group
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SMID-cap peers
The document states HBHC is compared to SMID-cap peers for valuation purposes.
Key Quotes (4)
"Our $230 PO is based on a target PB multiple of 1.2x our forward book value estimate, which is above our 2017E ROE of roughly 10%..."Source
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Quote #1
"We use a three-factor valuation framework (P/TBV, P/E, DCF) to arrive at our $42 price objective..."Source
HOUSE_OVERSIGHT_014383.jpg
Quote #2
"Our DCF assumes a two-stage model with terminal growth rate of 3.5% and a cost of capital of 8.5% to derive our $35 PO."Source
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Quote #3
"We use a three-factor valuation framework (P/E, P/TBV, DCF) to arrive at our PO of $13 and assign a 1.8x multiple to 2017E TBV and a 14x multiple on 2017E EPS, below historical multiples."Source
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Quote #4
Full Extracted Text
Complete text extracted from the document (3,530 characters)
downturn in the local real estate markets affecting Franklin's construction loans and increasing credit costs via higher charge-offs and provisions, and 3) inability to effectively fund asset growth driving greater than expected compression in the net interest margin.
Goldman Sachs (GS)
We value the brokers based on the relationship between ROE (return on equity) and PB (price to book), which has a high historical correlation. Our $230 PO is based on a target PB multiple of 1.2x our forward book value estimate, which is above our 2017E ROE of roughly 10% as we add in higher interest rate expectations and loosening regulations into our multiple.
We value the brokers based on the relationship between ROE (return on equity) and PB (price to book), which has a high historical correlation. Our $230 PO is based on a target PB multiple of 1.2x our forward book value estimate, which is above our 2017E ROE of roughly 10% as we add in higher interest rate expectations and loosening regulations into our multiple.
Risks to the downside are a weaker economy/capital markets, increased macro issues, tougher regulation, and litigation, while risks to the upside are a stronger economy, moderating macro risks, market share gains, and less onerous regulatory and legal issues.
Great Western Bancorp Inc (GWB)
We use a three-factor valuation framework (P/TBV, P/E, DCF) to arrive at our $42 price objective and assign a 2.0x multiple to our 2Q17E TBV given that we believe the market would pay premium for GWB's 2016 estimated returns of 15%, in line with the median premium of its peer group (High performing, Midwest peers, and SMIDs). We place a 16x multiple on our 2017E EPS, a premium to its peer group given higher quality earnings. Our DCF assumes a two-stage cost of capital of 10% and a terminal growth rate of 3%.
We use a three-factor valuation framework (P/TBV, P/E, DCF) to arrive at our $42 price objective and assign a 2.0x multiple to our 2Q17E TBV given that we believe the market would pay premium for GWB's 2016 estimated returns of 15%, in line with the median premium of its peer group (High performing, Midwest peers, and SMIDs). We place a 16x multiple on our 2017E EPS, a premium to its peer group given higher quality earnings. Our DCF assumes a two-stage cost of capital of 10% and a terminal growth rate of 3%.
Downside risks to our price objective are a prolonged downturn in the farm sector and lower for longer interest rate environment. Upside risks are a better than expected improvement in the farming industry and a much stronger economic improvement in the Midwest economy.
Hancock Holding (HBHC)
We use a three-factor valuation framework (P/TBV, P/E, DCF) to arrive at our $41 price objective. We assign a 1.5x multiple to our 2Q17E TBV, in line with SMID-cap peers based on their in-line return profile, and this translates to $35.75. We place a 14.5x multiple on our 2017E EPS, in line with other peers based on forecasted EPS growth, for $33. Our DCF assumes a two-stage model with terminal growth rate of 3.5% and a cost of capital of 8.5% to derive our $35 PO.
We use a three-factor valuation framework (P/TBV, P/E, DCF) to arrive at our $41 price objective. We assign a 1.5x multiple to our 2Q17E TBV, in line with SMID-cap peers based on their in-line return profile, and this translates to $35.75. We place a 14.5x multiple on our 2017E EPS, in line with other peers based on forecasted EPS growth, for $33. Our DCF assumes a two-stage model with terminal growth rate of 3.5% and a cost of capital of 8.5% to derive our $35 PO.
Downside risks to our price objective are regulatory issues, slowing growth and if M&A synergies do not materialize. Upside risks are better than expected cost saves, stronger loan growth that would lead to better than forecast spread revenue and lower credit costs.
Huntington Bancshares Inc. (HBAN)
We use a three-factor valuation framework (P/E, P/TBV, DCF) to arrive at our PO of $13 and assign a 1.8x multiple to 2017E TBV and a 14x multiple on 2017E EPS, below historical multiples. This is due to more stringent capital standards and the negative fee income impact of pending regulatory reform. Our DCF analysis uses a cost of equity of 15.7% in the first stage and 11% in the second stage, and a terminal growth rate of 3%.
We use a three-factor valuation framework (P/E, P/TBV, DCF) to arrive at our PO of $13 and assign a 1.8x multiple to 2017E TBV and a 14x multiple on 2017E EPS, below historical multiples. This is due to more stringent capital standards and the negative fee income impact of pending regulatory reform. Our DCF analysis uses a cost of equity of 15.7% in the first stage and 11% in the second stage, and a terminal growth rate of 3%.
Risks to our price objective are an inability to offset regulatory fee income headwinds and integration risk associated with FMER. Other risks are an inability to return capital to shareholders in a timely fashion or overpaying for an acquisition target.
IBERIABANK Corp (IBKC)
We use a three-factor valuation framework (P/TBV, P/E, DCF) to arrive at our $85 price objective and assign a 1.6x multiple to our 2Q17E TBV, in line with multiples of other
We use a three-factor valuation framework (P/TBV, P/E, DCF) to arrive at our $85 price objective and assign a 1.6x multiple to our 2Q17E TBV, in line with multiples of other
Bank of America
Merrill Lynch
Merrill Lynch
2016 Future of Financials Conference | 17 November 2016 69
HOUSE_OVERSIGHT_014383
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