Morgan Stanley Downgrades Flagstar Bank to Underweight, Cuts Target to $12

Morgan Stanley downgraded Flagstar Bank, National Association (NYSE: FLG) to underweight from overweight before the open on Wednesday, Nov. 4, and cut its price target to $12 from $15.

It is one action on the stock on Wednesday, so there is one action to report. Before the change, 10 of the 12 firms that rated Flagstar Bank in the past year rated it positive and two rated it neutral, with none negative. The median target among those firms was $14.25, ranging from $11.50 to $17.50.

The stock closed at $10.54 on Tuesday, Nov. 3, and had fallen 8.8% over the 20 sessions to that close. The new $12 target from Morgan Stanley sits above that close.

Recent filing

Flagstar Bank filed an 8-K with the Securities and Exchange Commission on Oct. 23, 12 days before the Morgan Stanley action, covering results of operations and financial condition, along with a Regulation FD disclosure. The filing is available here.

Scale

Flagstar Bank reported a net loss of $177.0 million for the fiscal year ended Dec. 31, 2025, compared with a loss of $1.12 billion a year earlier. In the quarter ended June 30, 2026, it posted net income of $34.0 million, or $0.06 per diluted share, against a loss of $70.0 million a year earlier. Cash and equivalents stood at $5.18 billion as of June 30. The company's market capitalization before the filing was about $4.38 billion.