Jefferies Cuts Price Targets on SunTrust Banks (STI) Due to Reduced Estimates
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Price: $7.62 -1.3%
Rating Summary:
13 Buy, 23 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
13 Buy, 23 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Jefferies is maintaining its Buy rating on shares of SunTrust Banks (NYSE: STI), but is reducing its price target from $27 to $25.
The company released its Q3 financial results on October 21 topping expectations. The firm reports that while environmental expenses were higher than expected, some positives include, lower-early stage delinquencies, accelerating C&I growth, strong capital, and future expense leverage.
During the quarter, strong loan growth drove net interest income higher as NIM declined. The firm notes that NIM should continue to be under pressure in the coming quarters.
An analyst at Jefferies comments, "We leave outer-year estimates for environmental expenses untouched, but the ramp to get there is now more gradual. Our more conservative outlook is a function of rising repurchase demands, elevated operating losses, and still high OREO expenses. Continued uncertainty around environmental expenses could act as an overhang in the near-term, especially for those valuing stocks off of '12 estimates."
Jefferies is lowering its EPS estimates for 2011 from $1.10 to $1.08, for 2012 from $1.95 to $1.55, and for 2013 from $2.95 to $2.75. Revenue estimates for the three years were also tweaked to $8.581 billion, $8.451 billion, and $8.853 billion.
For more ratings news on SunTrust Banks click here and for the rating history of SunTrust Banks click here.
Shares of SunTrust Banks closed at $18.57 yesterday.
The company released its Q3 financial results on October 21 topping expectations. The firm reports that while environmental expenses were higher than expected, some positives include, lower-early stage delinquencies, accelerating C&I growth, strong capital, and future expense leverage.
During the quarter, strong loan growth drove net interest income higher as NIM declined. The firm notes that NIM should continue to be under pressure in the coming quarters.
An analyst at Jefferies comments, "We leave outer-year estimates for environmental expenses untouched, but the ramp to get there is now more gradual. Our more conservative outlook is a function of rising repurchase demands, elevated operating losses, and still high OREO expenses. Continued uncertainty around environmental expenses could act as an overhang in the near-term, especially for those valuing stocks off of '12 estimates."
Jefferies is lowering its EPS estimates for 2011 from $1.10 to $1.08, for 2012 from $1.95 to $1.55, and for 2013 from $2.95 to $2.75. Revenue estimates for the three years were also tweaked to $8.581 billion, $8.451 billion, and $8.853 billion.
For more ratings news on SunTrust Banks click here and for the rating history of SunTrust Banks click here.
Shares of SunTrust Banks closed at $18.57 yesterday.
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