Compass Point Reiterates a 'Buy' on SunTrust Banks (STI); Solid Q2; Putbacks in FY13

July 24, 2012 7:21 AM EDT
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Price: $55.97 --0%

Rating Summary:
    16 Buy, 23 Hold, 4 Sell

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Compass Point reiterates a 'Buy' on SunTrust Banks (NYSE: STI) price target of $29.00.

Analyst, Mike Turner, said, "We continue to expect that the repricing of CDs, lower credit-related costs and a material drop in mortgage repurchase expense in FY13 will serve as earnings tailwinds.The stock has underperformed following the earnings release largely on concerns over the proforma Basel III estimate (management guided to a peer range of ~8.0%). While the implied 140 bps decline is a negative, the change does not impact our valuation as we have not ascribed a value to STI's excess capital."

"We increase our FY12 EPS estimate from $1.56 to $1.68 due to higher mortgage banking income. We lower our FY13 EPS from $2.68 to $2.58 due to greater than expected NIM pressure."

For an analyst ratings summary and ratings history on SunTrust Banks click here. For more ratings news on SunTrust Banks click here.

Shares of SunTrust Banks closed at $22.94 yesterday.

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