Compass Point Sees Capital Deployment Coming for E*TRADE Financial Corporation

In a report published Thursday, Compass Point analyst Michael Tarkan reiterated a Buy rating and $26.00 price target on

. In the report, Compass Point noted, “We are maintaining our Buy rating and $26 price target on ETFC shares after the company reported steady 2Q14 earnings, highlighted by an expected pull-back in trading activity, stronger spreads, and continued underlying credit improvement. We are maintaining our 2014 EPS estimate of $1.03, but we are lowering our 2015 estimate to $1.13, from $1.17, to primarily reflect weaker trading activity and slightly higher credit expenses. The company's capital plan remains on track and accretive debt paydown appears to be on the horizon. Management did provide a somewhat conservative outlook on provision expenses as a portion of its home equity portfolio will soon transition from interest-only to amortizing, but we remain comfortable with credit risk at this point, especially as the loan portfolio continues to wind down.” E*TRADE Financial Corporation closed on Wednesday at $21.27.