On Jun 13, 2014, we issued an updated research report on
CIT Group Inc.
). Though the company reported lower-than-expected first-quarter
2014 results, its strong balance sheet position and steady capital
deployment activities remain impressive.
CIT Group had recommenced dividend payout and share repurchases in
2013 following the termination of its agreement with the Federal
Reserve Bank of New York (which restrained the company from
deploying capital without prior approval). Further, given the
stable capital and liquidity positions, we believe that CIT Group
will continue to enhance shareholders' value going forward.
Additionally, CIT Group has been restructuring its business
operations given the changing operating environment. Apart from
re-organizing its segments, the company continues to divest its
Non-Strategic Portfolios. Upon completion, these initiatives are
expected to aid reduction of operating expenses.
However, CIT Group reported dismal first-quarter results owing to a
significant decline in net interest income and higher-than-expected
provision for credit losses. These were partially offset by a rise
in non-interest income and lower operating expenses.
The disappointing results triggered a downward revision in the
Zacks Consensus Estimate, as analysts became more bearish on CIT
Group's future performance. Over the past 60 days, the Zacks
Consensus Estimate for 2014 decreased 19.4% to $3.16 per share and
for 2015, the Zacks Consensus Estimate fell 8.9% to $3.97 per share
over the same time frame.
CIT Group currently has a Zacks Rank #3 (Hold).
Stocks That Warrant a Look
Some better-ranked banking stocks include
Euronet Worldwide Inc.
Ladder Capital Corp
). All these sport a Zacks Rank #1 (Strong Buy).
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