) to hold from sell.
Analyst Chris Brendler says his upgrade was based on a recent share pullback. Brendler says the company's shares are down to 0.62 times the book value. He says valuation now is more reflective of his cautious stance on Metris's fundamental outlook. He notes May master trust data showed a greater than expected rise in delinquencies, and raised the probability of such problems, though he currently believes this scenario is unlikely. Brendler says on the regulatory side, the $1.5B securitization Metris completed last month should help shore up capital and reserve ratios at the company's OCC regulated Direct Merchants Bank subsidiary. Brendler has a $1.60 per share estimate for both 2002 and 2003.