Wilmington Trust's $3.84 Take Under Catches Morgan Stanley's Pate, Suntrust's Hodgson And 9 Other Sellsiders With Pants Down
By now everyone is aware that M&T bank acquired Wilmington Trust in today's version of Merger Monday... however this time with a twist. The company was acquired at a 40%... discount. That's right, as shareholders were happy with their WL positions at close yesterday, it appears the financial firm, and its acquirer were all too aware that the sellside pump syndicate was woefully wrong on the name, and 11 analysts had an average target on the stock of $10.31. The question then becomes if Wall Street is so very wrong in evaluating one of its own to the tune of a 40% plunge to closing price, and 60% to the target consensus, just how overvalued are all other financial firms, all of which continue to trade based on circle jerk rating boosts by one another, even as those behind the Chinese Wall (such as M&T management and WL executives) know all too well the fair value of assets is way below where the gullible public is buying the stock. Which is why we present some of the most egregious examples of sellside hubris and pumpatude disclosed by this price discovery event: below are the hall of shame analysts who missed this take under by about a mile.
At the top: SunTrust's Mac Hodgson whose latest price target on WL was $22... just over 80% where the company ended up being acquired! Going down the list we see such other wizards of financial modelling as Keefe, Bruyette's McGratty who has a $13 PT, RBC's Cassidy who recently reiterated a price target of $12, Credit Agricole's Ruthschow with $11, Morgan Stanley's Pate with $10, B Riley's Stapp with $9, and so forth. One wonders if this cadre of hall of shamers was so very wrong on WL, just how correct their other buy "calls" must be...
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