Regions Financial reliance on margins 'now creating a problem' - Odeon Capital

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Regions Financial reliance on margins 'now creating a problem' - Odeon Capital
Credit: © Reuters.

Regions Financial (NYSE: RF ) was lowered to Hold from Buy at Odeon Capital on Monday, with the firm maintaining a $17.10 price target on the stock.

Analysts at the firm told investors that while they are a little late in making the rating adjustment, "it appears to me that the story has changed on this company."

"Regions has had good management for a decade now correcting the lapses of two prior administrations. The expansion of the business has been well-thought out allowing the company to reduce reliance on the core banking business," the analysts acknowledged.

"However, it appears that management’s reliance on margins above sales is now creating a problem," they added. Odeon believes RF must give up the focus on aligning its pricing to the markets.

"It is also being blindsided by weakness in some previously stable markets like real estate – residential and commercial," they wrote, adding that it is "not the time to buy this stock."

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