First Citizens Downgraded to Neutral by JPMorgan; Target Cut to $2,200
JPMorgan cut First Citizens’ rating to Neutral from Overweight and lowered its price target from $2,450 to $2,200. The firm warned that the absence of interest rate cuts this year will undermine the banking unit’s loan and deposit growth ambitions at its SVB franchise.
1. JPMorgan Downgrade
JPMorgan analysts reclassified First Citizens from Overweight to Neutral and trimmed the 12-month price target from $2,450 to $2,200, signaling reduced conviction in the stock’s near-term appreciation potential.
2. Rate Outlook Impact
The downgrade reflects expectations that the Federal Reserve will maintain current rates, which JPMorgan believes will constrain the bank’s ability to expand its loan book amid elevated funding costs.
3. SVB Franchise Concerns
First Citizens’ acquisition of Silicon Valley Bank assets was expected to boost deposits and lending, but JPMorgan cautioned that stagnant rates will slow deposit inflows and suppress loan demand in the SVB franchise.