Citigroup Upgrades Large Cap Banks On 'Game-Changing' US Move (BAC, FHN, FITB, KEY, MTB, CMA, USB)

October 14, 2008 10:06 AM EDT

Citigroup ugraded a number of large cap banks on plans by the U.S to inject $250 billion directly into a number of banks. Citigroup called the move "Game Changing".

Upgraded from Hold to Buy:
Bank of America (NYSE: BAC), target raised from $31 to $38
First Horizon National Corp. (NYSE: FHN), target raised from $11.64 to $14
Fifth Third Bancorp (Nasdaq: FITB), target raised from $14 to $16 target
KeyCorp (NYSE: KEY), target raised from $11 to $15 target
M&T Bank Corp. (NYSE: MTB), target raised from $63 to $92 target

The firm said, "All of these banks can benefit from increased availability to attractively priced capital, and these upgrades are all valuation calls largely due to lower assumed cost of capital. We remain below consensus on all of these names."

Upgrading from Sell to Buy:
Comerica Incorporated (NYSE: CMA), target raised form $20 to $31

The firm said, "Our prior investment call on this bank was all based on inadequate capital. With this new plan, capital will be more readily available than we originally expected and at a significantly lower cost."

Upgrading from Sell to Hold:
US Bancorp (NYSE: USB), target raised from $23 to $32.

The firm said, "US Bancorp is one of the stronger banks in our universe, in our view. We continue to see near term EPS risk, but with our expectation that the group gets revalued we do not see significant downside to warrant a Sell recommendation at this time."

Ratings Maintained, Price Target Raised:
PNC Financial Services Group Inc. (NYSE: PNC) rating Hold, target raised from $64 to $74
JP Morgan (NYSE: JPM) rating Hold, target raised from $40 to $45.

Related Categories

Upgrades

Stocks Mentioned

Related Entities

• JPMorgan
• Citi
• Banc of America

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