OceanFirst Financial cut to Neutral at DA Davidson on ‘higher for longer’ rates

As previously reported, DA Davidson analyst Manuel Navas downgraded OceanFirst Financial to Neutral from Buy with a price target of $17, down from $21. The analyst is citing the impact of a “higher for longer” interest rate environment in FY23 that has both paused commercial real estate based loan growth and compressed net interest margins, along with the removal of credit outperformance as a potential catalyst. In a better rate environment, loan growth can rebound to double-digit levels and expected FY24 operating plan benefits should drive more efficient operations, the firm tells investors in a research note.