Analyst Cuts Estimates on Big Banks; Upgrades JPMorgan (JPM), Citi (C) Remains Top Pick (BAC) (WFC)

August 17, 2011 9:50 AM EDT
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Atlantic Equities' banking analyst Richard Staite lowered earnings estimates across the board Wednesday morning.

Citing slowing growth in the US, Staite cut FY12 estimates on BofA (NYSE: BAC) by 35 percent, on Wells Fargo (NYSE: WFC) by 14 percent, on PNC (NYSE: PNC) by 12 percent, on US Bancorp (NYSE: USB) by 11 percent, on JPMorgan (NYSE: JPM) by about 9 percent and on Citi (NYSE: C) by 5 percent.

The analyst upgraded shares of JPMorgan from Neutral to Overweight while maintaining a $50 price target. Staite believes JPMorgan will soon begin to see benefits from accelerating gains in market share and attractive growth amid the recent volatile trading environment. Specifically, Staite points to share gains in Europe, in the fixed income, equity and asset management markets and in treasury services.

The Atlantic analyst maintains Citi (NYSE: C) as his top pick for the banking sector. Staite reduced his target on the stock from $63 to $52.

Staite cut his price target on BofA from $13.50 to $9, on Wells Fargo from $38 to $32, on PNC from $75 to $62 and on US Bancorp from $27 to $26.

These stocks are trading higher just after the open Wednesday:
  • JPMorgan up 2.2 percent to $36.81
  • BofA up 2.2 percent to $7.56
  • Wells Fargo up 1.5 percent to $24.92
  • PNC up 1.4 percent to $47.70
  • US Bancorp up 1.2 percent to $22.44
  • Citi up 2 percent to $30.56
The Financial Select Sector SPDR ETF (NYSE: XLF) is up 1.55 percent this morning.

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