JP Morgan Downgrades Pacific Capital Bancorp

Analyst John Pancari says the network of community banks' valuation has steadily improved, owing to improved fundamentals and conservative outlook by management

JP Morgan downgrades community bank network Pacific Capital Bancorp (PCBC ) to neutral from overweight.

Analyst John Pancari says he believes the stock's valuation adequately reflects the company's earnings per share outlook over the next 12 months.

He says it is consistent with his expectations, and the company's valuation has steadily improved since April, owing to improving fundamentals and notably conservative outlook by management.

Pancari notes the stock has appreciated about 21% since April 11, vs. 4% for his coverage universe, the JP Morgan Small Cap Bank Index. Trading at about 14.9 times his $2.35, up from 13.7 times on Apr. 11, he believes the shares are fully valued in light of the company's earnings outlook.

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