BUZZ - Morgan Stanley downgraded its rating due to Flagstar Bank's delayed turnaround

November 4 - ** Morgan Stanley Research has downgraded regional lender Flagstar Bank (FLG.N) from "Overweight" to "Underweight", citing a slower business recovery than initially expected by the broker due to rising interest rates.

** The target price has been cut from $15 to $12, but this still implies a 13.9% upside from the stock’s latest closing price.

** Last month, Flagstar Bank delayed its 2027 financial targets (link) to 2028, citing the higher interest rate environment and its impact on credit costs.

** “The timing of this downgrade also reflects our comprehensive valuation post-earnings, with peer commentary noting that as interest rates rise and loan demand remains strong, competition for deposits is intensifying and the importance of operational accounts is growing,” — Morgan Stanley analysts.

** Of 18 brokerages covering the stock, 11 rate it “Buy” or higher, 6 rate it “Hold,” and 1 rates it “Sell”. The median target price is $13 — LSEG data.

** As of the previous session's close, FLG shares were down 16.3% so far this year.

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