Nomura Securities on U.S. Banks: WFC and STI Upgraded to 'Buy', USB & PNC Downgraded to 'Neutral'
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Price: $53.42 --0%
Rating Summary:
21 Buy, 17 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
21 Buy, 17 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Nomura Securities on U.S. Banks: WFC and STI Up to Buy, USB & PNC Down to Neutral
Analyst, Brian Foran, said, "We think HARP v2.0 is going to be a much bigger revenue tailwind to banks than the market realizes, due to better volumes and higher gain on sale. As a result, the big mortgage banks have a dual tailwind: 1) numbers are too low for the next few quarters, and 2) they have an unexpected revenue tailwind which provides flexibility to execute on efficiency initiatives. As a result, we reiterate our Buy on Fifth Third (Nasdaq: FITB), and upgrade Wells Fargo (NYSE: WFC) and SunTrust (NYSE: STI) to Buy from Neutral. To make room in our ratings distribution, we downgrade US Bank (NYSE: USB) and PNC (NYSE: PNC) from Buy to Neutral."
Also, FITB was added to the Nomura U.S. Conviction Buy List and PNC was removed.
On WFC: TP from $30 to $38; 2012E / 2013E EPS from $3.00 / $3.30 to $3.35 / $3.50 vs. Street at $3.18 / $3.63, respectively.
On STI: TP from $22.5 to $29; 2012E / 2013E EPS from $1.65 / $2.75 to $1.80 / $2.75 vs. Street at $1.72 / $2.64, respectively.
On USB: TP from $31 to $33; 2012E / 2013E EPS from $2.70 / $2.90 to $2.80 / $3.00 vs. Street at $2.67 / $2.94, respectively.
On PNC: TP remains $65; 2012E / 2013E EPS from $6.35 / $6.50 to $6.45 / $6.50 vs. Street at $6.13 / $6.71, respectively.
Analyst, Brian Foran, said, "We think HARP v2.0 is going to be a much bigger revenue tailwind to banks than the market realizes, due to better volumes and higher gain on sale. As a result, the big mortgage banks have a dual tailwind: 1) numbers are too low for the next few quarters, and 2) they have an unexpected revenue tailwind which provides flexibility to execute on efficiency initiatives. As a result, we reiterate our Buy on Fifth Third (Nasdaq: FITB), and upgrade Wells Fargo (NYSE: WFC) and SunTrust (NYSE: STI) to Buy from Neutral. To make room in our ratings distribution, we downgrade US Bank (NYSE: USB) and PNC (NYSE: PNC) from Buy to Neutral."
Also, FITB was added to the Nomura U.S. Conviction Buy List and PNC was removed.
On WFC: TP from $30 to $38; 2012E / 2013E EPS from $3.00 / $3.30 to $3.35 / $3.50 vs. Street at $3.18 / $3.63, respectively.
On STI: TP from $22.5 to $29; 2012E / 2013E EPS from $1.65 / $2.75 to $1.80 / $2.75 vs. Street at $1.72 / $2.64, respectively.
On USB: TP from $31 to $33; 2012E / 2013E EPS from $2.70 / $2.90 to $2.80 / $3.00 vs. Street at $2.67 / $2.94, respectively.
On PNC: TP remains $65; 2012E / 2013E EPS from $6.35 / $6.50 to $6.45 / $6.50 vs. Street at $6.13 / $6.71, respectively.
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