Barnett Banks Inc. shares were downgraded by Lehman Brothers analyst Michael L. Mayo on Thursday, after the stock price hit a new 52-week high of $55.625.
Barnett shares tktk to tktk, Thursday, after Mr. Mayo downgraded them to "outperform" from "buy." He said takeover speculation had pushed the stock price higher than it should be, based on earnings.
What's more, he said, the stock price made the Jacksonville, Fla., bank less attractive as a merger target.
"It's still in the takeover basket, but it's no longer a table pounder in the face of a 30% gain in just a few months," Mr. Mayo said.
Other analysts agreed that Barnett has grown less likely to be taken over, noting that its $5.4 billion in market capitalization would make it too expensive for most buyers.
"Acquisition speculation is misfounded," said Nancy Bush, a bank analyst with Brown Brothers Harriman & Co. Assuming a 30% takeover premium, the bank would be sold at about $7 billion, "which would be, far and away, the biggest deal we've seen," she said.
Barnett officials have been "firmly adamant that they don't want to be taken over. It takes two to tango," added Sally Pope Davis, a bank analyst with Goldman, Sachs & Co.
Barnett has strong telephone and computer systems in place, and does not face the pressure to find a technologically advanced partner that some banks do, said analysts.
Separately, American Banker's survey of short interest in bank stocks traded through the National Association of Securities Dealers showed a decrease of 0.4% in short positions during the month ended July 14. (See tables on this page and page 30.)
Short interest is the outstanding volume of shares borrowed and promptly sold, in hopes of profiting from a falling stock price.
The largest short position in Nasdaq stocks continued to be in U.S. Bancorp, which is acquiring West One Bancorp in a controversial deal.
