What happened
As it did last week, Silvergate Capital's (SI 11.11%) stock took a fairly hard fall over the past five trading days. According to data compiled by S&P Global Market Intelligence, the bank with a heavy cryptocurrency habit saw its share price decline by more than 13% over the period, compounding the 19% drop of the previous week.
So what
Silvergate continues to be under fire not only for its involvement in digital money, but its business relationship with entities connected with failed cryptocurrency exchange FTX. The fallout from that collapse continues to damage nearly every asset related to cryptos; while in many ways Silvergate functions as a traditional bank, it is more strongly identified with cryptocurrency in the minds of many investors.
Adding to those concerns, over the course of the week two analysts from prominent financial institutions cut their price targets on the lender's stock. On Tuesday, JPMorgan Chase's Steven Alexopoulos enacted a 40% chop, to $30 per share from his previous $50. Wells Fargo prognosticator Jared Shaw's slice wasn't as deep but it was a slice nevertheless, to $27 from $30.
Alexopolous expressed concern about regional bank stocks in general, writing in a new research note that the segment is "particularly vulnerable" to downward earnings revisions. He added that net interest margins and credit quality could both be due for a fall too.
Now what
Interestingly, neither analyst rates Silvergate a sell at the moment. Both men maintained their existing recommendations on the stock despite the price target cuts. Alexopoulos is keeping his overweight (buy) rating, while Shaw is sticking to his equal weight (neutral) rating.
