Bank OZK downgraded to Sell from Buy at Citi

Citi analyst Benjamin Gerlinger double downgraded Bank OZK to Sell from Buy with a price target of $37, down from $57. Bank OZK has been instrumental in the development of high-dollar commercial real estate projects throughout the U.S. for multiple decades, the analyst tells investors in a research note. However, the firm has “newfound, but substantial concerns” with what it believes to be OZK’s largest individual loan totaling $915M, a multi-use project in Atlanta, and life science construction lending in general, which it says is largely idiosyncratic to OZK versus its peer banks. When thinking about a share price valuation, Citi juxtaposed the bank’s healthy pre-provision net revenue outlook against its tightening capital levels and compounding credit concerns.