Sandy Spring Bancorp upgraded to "hold" - update

02/23/04 - Legg Mason

NEW YORK, February 23 (New Ratings) – Analysts at Legg Mason upgrade Sandy Spring Bancorp (SASR) from "sell" to "hold."

Shares of Sandy Spring Bancorp, a community banking company in the US, are currently trading at $34.90.

According to Legg Mason's research note published this morning, the current upgrade in rating in based on valuation. The analysts say that the company's share price has reached the target price. The company's stock was earlier downgraded to "sell" due to acquisition speculations and the weak mortgage banking outlook, the analysts mention. The analysts believe that the expected improvement in interest margins would be offset by the lower mortgage banking revenues this year.

According to Legg Mason, Sandy Spring Bancorp has highly productive franchises in the rich markets of the US. However, the analysts believe that the company is unlikely to post significant earnings growth in the near term. Around 45% of the company's assets are based on its security portfolio, the analysts say. The high exposure to the securities portfolio is, however, unlikely to boost the valuation of the company's stock in the near term, the analysts add.

The EPS estimates for 2004 and 2005 are $2.19 and $2.57, respectively. The P/E estimates for 2004 and 2005 are 15.9x and 13.6x, respectively.

Legg Mason upgrades Sandy Spring Bancorp from "sell" to "hold."