Bernstein Lifts Estimates/Price Targets on US Banks; JPMorgan Remains Top Pick (JPM) (WFC) (BAC) (C)

Bernstein's John McDonald boosted earnings estimates and price targets on a number of banking stocks Thursday morning. The analyst cited a reduction in mortgage-related expenses, increased momentum in trading, and better mortgage originations recently.

McDonald said JPMorgan (NYSE: JPM) is his top banking pick given better earnings visibility and the lowest PE multiple based on 2013 earnings within the group.

The analyst said he sees "room to run" in regards to the recent boom in mortgage refis. He believes both JPMorgan and Wells Fargo (NYSE: WFC) gained market share in this segment over the first quarter.

Price target changes:

• JPMorgan from $45 to $56, Outperform rating;
  
• Wells Fargo from $35 to $40, Outperform;
  
• BofA (NYSE: BAC) from $9 to $11, Market Perform;
  
• Citi (NYSE: C) from $40 to $45, Outperform;
  
• US Bancorp (NYSE: USB) from $31 to $33, Market Perform; and
  
• PNC (NYSE: PNC) from $67 to $72, Market Perform.

The Financial Select Sector SPDR ETF (NYSE: XLF) is indicated to open about 0.5 percent lower Thursday morning.

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