Financial Stocks Drifting Back Near Even for Today’s Session

Financial stocks were edging lower, with the NYSE Financial Sector Index dropping slightly more than 0.1% while financial companies in the S&P 500 Index were slipping about 0.1%.

In company news, shares of the Pra Group (PRAA) fell as much as 7.5% on Wednesday, sliding to a session low of $27.90 each, after analysts at Janney lowered their investment rating for the specialty finance company to Sell from Neutral and trimmed their price target for the company’s stock by $5 to $22 a share.

The Janney analysts also cut their FY18 per-share earnings estimate for the company that buys and then tries to collect on non-performing loan portfolios to $1.14 from $2.10 per share previously, blaming lower purchase price multiples, rising interest costs following a recent refinancing and higher operating expenses tied to plans to build additional call centers as likely “headwinds” to future profits.

“Simply put, PRAA continues to buy (account) receivables at the lowest initial purchase price multiples that we have seen in a decade,” the analysts wrote today in a research note to clients, adding they “do not think a liquidation analysis supports PRAA’s current valuation.”

In other sector news,

(+) PAYX, (+1.2%) RBC Capital Markets raises price target by $3 to $57 a share while reiterating its Underperform stock rating.

(+) MKTX, (-0.8%) Reports a 2.2% increase in total monthly trading volume during September compared with prior month, rising to $116.8 bln from $114.3 bln during August. U.S. high-grade debt made up almost 57% of September volume, reaching $66.5 bln.

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