First Republic Bank FRC, -21.92% dropped 18.6% in premarket trades despite an unprecedented move by 11 banks to deposit $30 billion with the bank, which has been hit with withdrawals in the wake of the demise of Silicon Valley Bank last week. JPMorgan Chase analyst Steven Alexopoulos reiterated an outperform on First Republic and said the stock is a top pick for the firm. JPMorgan Chase cut its price target on the stock to $62 a share from $150. “We’ve covered the bank sector for over two decades and we have never seen the industry come together before to help secure a peer in need,” Alexopoulos said. “With a backstop now being provided, the top questions from investors will now be (1) is $30 billion of incrementaldeposits enough and (2) what is the earnings power of the company in the aftermathof this industry-wide crisis?” He said the stock is currently trading well below total book value and well below “burn-down” total book value for unrealized losses on its hold-to-maturity assets. JPMorgan sees First Republic “as a higher risk but potentially very high reward name,” he said.
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