Brean Murray Cuts Doral Financial to Hold
Brean Murray downgraded Doral Financial (DRL) to hold from accumulate.
Analyst Eric Rothman says that without support of 3.5% dividend yield, he expects shares to experience additional downward pressure. He says the pressure could be similar to the 15% drop R&G Financial experienced after it suspended its dividend. Given the continued requirement to issue delinquent 2005 and first quarter 2006 results, the elimination of Doral Financial's dividend would generally be viewed as a prudent move, and is also viewed positively by regulators, he says. Based on this new development and the lack of additional constructive data points, he suspends his $21 stock price target.
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