Two Different Takes on KBW (KBW)

KBW, Inc. (NYSE: KBW) is the parent of Keefe Bruyette & Woods and there is a bit of a horse race on its future prospects in two very different analyst calls.

JMP Securities called it well-positioned to benefit from a wave of smaller banks repaying their TARP aid and a potential round of small-bank consolidation.  The report noted some $165 million in fees available to it over the next two years after two boutique competing firms have died off.  Another issue in the note showed credit issues, weak loan demand, regulation, and low net-interest margins all leading to more M&A in sector consolidation.  KBW stands to win there.

Unfortunately, this was a take on the good and the bad and the bad note is a Strong Sell rating from Zacks.  The firm noted, “KBW, Inc. announced fourth-quarter loss of 28 cents per share on February 23 that missed analysts’ expectations by 1,500%. The Zacks Consensus Estimate for the current year slid to 89 cents per share from $1.12 per share in the last 30 days as next year’s estimate dipped 19 cents per share to $1.74 per share in that time span.”