A troubled company in turnaround, New York Community Bancorp (NYCB -4.59%) has been one of the least popular banking stocks on the market in recent times. However, one analyst believes the shares are now priced fairly, as he recently upgraded his recommendation on the stock to the equivalent of a hold. This helped the company's stock book a nearly 9% gain in price across this week, according to data compiled by S&P Global Market Intelligence.

Rate cut supports struggling lender

That upgrade occurred in the wee hours of Tuesday morning, and came from Raymond James Financial's Steve Moss. Although Moss shifted his recommendation on New York Community Bancorp from the previous underweight (sell, in other words), he did not place a price target on the shares.

Tuesday was the day before the Federal Reserve (Fed) pulled the lever on its 50-basis-point interest rate cut; the analyst's move was made in anticipation of the regulator's reduction. Although economists and other pundits varied in their estimates for how deep the cut would go, the vast majority expected some degree of chop.

New York Community Bancorp isn't realistically poised for sudden and dramatic improvement. The bank expanded too quickly in the wrong direction, especially with its acquisition of struggling lender Signature Bank in 2023. Not long after that, it admitted that a clutch of large loans in its portfolio were at risk.

Investors vigorously sold out of the stock, and management cut the dividend to nearly nothing. The company was in lousy-enough shape to warrant an investor bailout, to the tune of over $1 billion.

Still not a buy, though

With the Fed's rate cut, Moss feels there is "increased merit to owning liability-sensitive" banks in an environment of lower rates. That doesn't make him a New York Community Bank bull, however, as he cautioned that the company's recovery should last for an "extended" period of time.