EGBN: Discontinuing Coverage of Eagle Bancorp, Inc.

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EGBN: Discontinuing Coverage of Eagle Bancorp, Inc. with a Final Price Target of $49.00 and a Final Rating of Neutral.

Eagle Bancorp, Inc. (EGBN – NASDAQ CM – Recent Price: $39.72)
Rating: Neutral / Buy Price: $43.00 / Target (Sell) Price: $49.00

Summary: We are discontinuing coverage of Eagle Bancorp, Inc. (EGBN) as part of a reallocation of resources in our Research Department. Our outlook for EGBN remains unchanged. We are maintaining our 2020 and 2021 EPS estimates of $4.24 and $4.45. We are also maintaining our $49.00 price target, which is based on a 11.9x EPS multiple applied to our $4.24 EPS estimate for 2020. We are reiterating our Neutral rating on shares of EGBN.

A note about the Corona Virus and related market turmoil: We recognize that our earnings estimates and price targets were established prior to the full-blown worries about the Corona Virus taking a toll on the market. The possibility that the Corona Virus could impact worldwide economic growth in 2020 is certainly real. However, the length and extent of any economic disruptions are very speculative at this point. We have chosen not to alter our earnings estimates for this reason. Furthermore, our valuation and price target are based on the market multiples from several weeks ago, prior to the recent market correction. We currently believe any economic impact from the Corona Virus will be felt in 2020. We do not expect the impact to extend indefinitely and carry into 2021. A year from now, stocks should be trading on expectations for 2021 earnings, a period that should bear few signs of any Corona Virus impact. We believe that the EPS multiple we are using for our price target is reasonable and that our price target remains valid, despite the recent downturn in the markets.

Joe Gladue

Joseph Gladue has over 30 years industry experience with over 25 years focused on banking research. Mr. Gladue was Director of Research at several firms including Cohen & Company and Merion Capital Group. Previously he was a senior research analyst at B. Riley and worked in finance at Bank of the Internet. Joe has covered small and mid-cap banks across the US and has also follow companies in other financial service industries. Joe also provides his banking expertise in the asset management arena for Bluestone Capital Partners. Joe can be reached at [email protected], 215-572-8700.