EuroBanc shares surge on upgrade

Shares of EuroBancshares Inc. (Nasdaq:EUBK) are on a tear today after the holding company for Eurobank, which provides commercial banking products and services to small and mid-sized businesses in Puerto Rico, was upgraded by Keefe Bruyette and Woods to “outperform” from “market perform” on valuation.

Keefe Bruyette and Woods analyst Bain Slack said there is still 73% upside to the current stock price and is maintaining a price target of $8.

“We think that due to lack of liquidity, it is better to be early rather than try and time the bottom,” Slack wrote in a research note today. “While the Fed cuts will help all of the Puerto Rican banks over the next year, Eurobank is the only stock where … we believe that credit risk, while still significant, is priced in the stock.”

The analyst says  that though credit costs are still elevated, management has been able to stabilize lease net charge-offs, which represented . . .

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