JP Morgan Cuts First Marblehead to Neutral
JP Morgan cut First Marblehead (FMD ) to neutral from overweight.
Analyst Marco Vilegas cited increased uncertainty stemming from the resignation of CEO Dan Myers. He noted the CEO's resignation is related to gifts exchanged with a client and says this is a rather extreme outcome, amidst a tumultuous time for the company. The development adds to a string of negative news flow on the stock, Vilegas said. He noted that the appointed CEO joined the company in August and he thinks a new level of uncertainty may make it more challenging for First Marblehead to add and retain important clients. While shares trade at a discount to the education finance group, Vilegas believes the discount is warranted given recent developments.