DA Davidson downgraded New York Community Bancorp to Neutral from Buy with a price target of $5, down from $8.50. Despite issuing a positive update Tuesday night, whereby total deposits increased $1.5B to $83B, with the headline risk of Moody’s downgrade to junk and concerns over its commercial resale estate exposure, there is a risk of New York Community’s deposit outflows going forward, the analyst tells investors in a research note. The firm says the bank is willing to sell non-strategic assets if it deemed it necessary to build capital, but this wouldn’t solve the potential risk of deposit outflows. New York Community is no longer trading based on fundamentals, says DA Davidson.
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