Wachovia Upgraded on Golden West Buy

From The Contra Costa Times:

Shares of Wachovia Corp., the parent of Oakland-based Golden West Financial Corp. (GDW) fell along with the rest of the banking sector on Thursday, failing to react to an upgrade from Standard & Poor’s. S&P analyst Mark Hebeka pointed at the purchase of Golden West as a chief revenue generator, as well as a source of favorable synergy.
Hebeka upgraded Wachovia to a strong buy from a buy, citing what he sees as a “compelling” valuation and the bank’s “strong growth prospects and sound business strategy.”
The stock, however, has had trouble recovering from a slump since the acquisition was announced in May and remains 6 percent below its May highs.
The market has remained skeptical of the transaction because of potential risks associated with Golden West’s portfolio of mortgages, according to Bear Stearns analyst David Hilder, who reiterated an underperform rating on Wachovia’s stock in late July.

Posted by on September 8th, 2006 at 12:47 am


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