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Fly News Breaks for August 14, 2019
Aug 14, 2019 | 08:45 EDT
Compass Point analyst Scott Valentin lowered his price target on CIT Group shares to $57 from $62 after the company announced a definitive agreement to acquire Mutual of Omaha Bank for a purchase price of $1B. Continuing share repurchases would have been more accretive in the near-term, but he views the acquisition positively from a longer-term strategic perspective as it advances CIT's goal of becoming more "bank-like," improves the quality of the deposit base and has the potential to reduce required operating capital levels, depending on how the Federal Reserve perceives the combined entity. Additionally, by becoming more bank-like, Valentin thinks CIT becomes a more attractive acquisition candidate, the analyst noted. He keeps a Buy rating on CIT Group shares.
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