Nomura Securities on Banks: 4Q Wrap Up - Paying for Growth

Nomura Securities on Banks: 4Q Wrap Up - Paying for Growth

Analyst, Brian Foran, said, "The banks have had a big run on the back of improving loan growth, a better macro backdrop and rallying credit markets. The key issue from here is regionals are at 12x 2012, and while loan growth is kicking in, estimates are roughly flat as banks pay for that growth via higher expenses, lower loan yields, higher provisions and flattening capital ratios. Key changes to price targets below:

BB&T (NYSE: BBT): Our price target moves to $25 from $21.5, implying BBT trades at 10x our 2012E EPS.

Comerica (NYSE: CMA): Our price target moves to $28 from $27.

City National (NYSE: CYN): Our price target moves to $47 from $46.

First Horizon National (NYSE: FHN): Our price target moves to $9 from $8, implying FHN trades at 10x our 2013E EPS.

Synovus Financial (NYSE: SNV): Our price target moves to $1.75 from $1.50, implying SNV trades at 12x our 2013E EPS.

SunTrust (NYSE: STI): Our price target remains $22.5, implying STI trades at 10x the average of our 2012E and 2013E EPS.

U.S. Bancorp (NYSE: USB): Our price target moves up to $31 from $30, implying USB trades at 11x our 2012E EPS.

Western Alliance (NYSE: WAL): Our price target moves up to $8.5 from $7.5, implying WAL trades at ~10x our 2013E EPS.

Zions Bancorp (Nasdaq: ZION): Our price target goes to $18 from $19, implying ZION trades at ~10x the average of our 2012E and 2013E EPS.

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