Wedbush lowers NYCB target on ‘tremendously dilutive’ equity raise

Wedbush lowered the firm’s price target on New York Community Bancorp to $3 from $3.50 and keeps an Underperform rating on the shares. The company announced an equity infusion of $1.05B from several institutional investors at $2.00 per share for both the common and the conversion feature of the preferred, the analyst tells investors in a research note. The firm says that while the deal “provides a much-needed lifeline” to NYCB, it is “tremendously dilutive” to common shareholders. Wedbush estimates the issuance of common shares combined with a full conversion of convertible preferred shares would result in a doubling of common shares outstanding to nearly 1.5B shares from 722M at December 31, 2023, and would result in pro forma tangible book value of $6.00 per share, down from $10.03 at year end.