B. Riley downgrades NewtekOne on more challenging environment

B. Riley downgraded NewtekOne to Neutral from Buy with a price target of $13, down from $16. The analyst cites a potentially more challenging operating environment for the downgrade. NewtekOne’s earnings going forward could be “more subdued than expected” as weaker economic conditions could translate into lower SBA 7(a) loan originations, require heavier loan loss provisioning, and push past non-accrual loans higher, the optics of which would likely prevent multiple expansion, the analyst tells investors in a research note. The firm also believes the market will likely continue to assign NewtekOne a lower-than-peer valuation until its visibility, messaging, and data consistency improve.