UPDATE: Sterne Agee Initiates Coverage on Home Bancshares as Current Valuation Provides Minimal Margin of Safety

In a report published Thursday, Sterne Agee analyst Peyton Green initiated coverage on Home Bancshares (NASDAQ: HOMB) with a Neutral rating.

In the report, Sterne Agee noted, “Although our profitability and growth outlook for HOMB is quite favorable, we are initiating coverage with a Neutral rating given the current valuation of 19x our 2014E, 17x our 2015E, and 3.9x pro forma TBVPS of $8.40, which does not provide much, if any, margin of safety, in our view. We believe HOMB will hold a healthy premium to peer multiples, provided our profitability projections pan out.”

Home Bancshares closed on Wednesday at $33.10.