First Republic's Deposits Plunge, Stock Drops

Other U.S. lenders followed First Republic lower, with the KBW Regional Banking Index underperforming the broader S&P 500 Index.

Janney Montgomery Scott analyst Timothy Coffey, who also downgraded First Republic to sell after its results, said the company is in need of a major pivot. He cut his target price to $8 from $10 previously.

The average target price for the bank, which sits at roughly $42, according to data compiled by Bloomberg, remains far above the stock’s current level of about $12, as some analysts haven’t updated their targets in months.

While Maxim’s Michael Diana also downgraded shares on Tuesday — lowering his rating to hold from buy — he’s less concerned about the bank’s long-term viability.

“We do not believe that First Republic is going to fail, but it could be a long grind back to previous levels of profitability and growth, unless management can devise a shorter-term solution that is not accompanied by large dilution of common shareholders,” he wrote in a note to clients.

(Image: Bloomberg)