Flagstar Bank Ratings Upgraded to BBB-, F3; Price Target Raised to $16
Fitch Ratings raised Flagstar Bank’s long-term deposit rating to BBB- and short-term to F3, and upgraded its long-term issuer rating to BB+ citing improved asset quality, return to profitability, higher capital and enhanced funding profile. Morgan Stanley increased Flagstar Financial’s price target to $16 from $14 while maintaining an Equal Weight rating on prospects for loan growth, wider net interest margins and strong capital return.
1. Fitch Upgrades Ratings to Investment Grade
Fitch upgraded Flagstar Bank’s long-term deposit rating to BBB-, its short-term rating to F3 and its long-term issuer rating to BB+ after the bank strengthened asset quality, returned to profitability, boosted capital levels and improved its funding profile. These investment grade ratings are expected to lower Flagstar’s cost of funds, support deposit expansion and enhance relationships with commercial, municipal and institutional clients.
2. Morgan Stanley Raises Price Target to $16
Morgan Stanley raised Flagstar Financial’s price target to $16 from $14 and kept an Equal Weight rating, citing anticipated loan growth, expanding net interest margins and robust capital returns. The adjustment reflects stronger performance expectations across midcap banks and sets a higher benchmark for Flagstar’s future earnings and growth trajectory.