Valley National Bancorp (NASDAQ:VLY) shares fell following New York Community Bancorp 's (NYSE:NYCB) disappointing 4Q23 earnings release on Wednesday, but analysts at Citi believe the downside pressure "is rather misplaced."
Analysts, who have a Neutral rating and $11 price target on VLY, said while the scars from "the Silicon Valley (and associated deposit run) are still rather fresh," they believe the "recent news is very different and rather idiosyncratic in nature."
"While it is not lost on us that a rapid price change in bank stocks typically invokes fear into the system (lowering multiples and increasing deposit costs), we find the step-up today as being quite different," analysts wrote.
"However, we would note that NYC deposits might become a little more expensive over the near term – CD pricing and incentives to retain deposits – but as of now, our outlook and thoughts on regional banks remain, albeit at a lower valuation for the space," analysts concluded.
After initially hitting a low of $9.12 per share, VLY is trading at $9.85, down 5.6% as of 12:00 pm ET.