Compass Point Reiterates a 'Buy' on SunTrust Banks (STI); Near-Term Bumps, But Overall Optimistic
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Price: $7.88 +3.55%
Rating Summary:
13 Buy, 23 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
13 Buy, 23 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Compass Point reiterates a 'Buy' on SunTrust Banks (NYSE: STI) price target lowered from $31 to $29.
Analyst, Mike Turner, said, "We continue to expect that the repricing of CDs, lower credit-related costs and a material drop in mortgage repurchase expense in FY13 will serve as earnings tailwinds. While NII will likely decline Q/Q in 2Q12 due to anticipated $35MM reduction in interest income from the expiration of an interest rate swap, our detailed forecast estimates NII should stabilize and grow again in 2H12. Adjusting for 70bps in provision, we estimate STI can earn $2.78 per share on a core basis in FY13, which would equate to a 9.9% ROTCE. Thus, we find shares attractively valued at .89x TBV for a stock that we expect will earn in excess of a required return in the 8.5%-9.5% range...We are lowering our FY12/13 EPS estimates from $1.72 and $2.90, to $1.56 and $2.68, respectively."
For an analyst ratings summary and ratings history on SunTrust Banks click here. For more ratings news on SunTrust Banks click here.
Shares of SunTrust Banks closed at $22.72 yesterday.
Analyst, Mike Turner, said, "We continue to expect that the repricing of CDs, lower credit-related costs and a material drop in mortgage repurchase expense in FY13 will serve as earnings tailwinds. While NII will likely decline Q/Q in 2Q12 due to anticipated $35MM reduction in interest income from the expiration of an interest rate swap, our detailed forecast estimates NII should stabilize and grow again in 2H12. Adjusting for 70bps in provision, we estimate STI can earn $2.78 per share on a core basis in FY13, which would equate to a 9.9% ROTCE. Thus, we find shares attractively valued at .89x TBV for a stock that we expect will earn in excess of a required return in the 8.5%-9.5% range...We are lowering our FY12/13 EPS estimates from $1.72 and $2.90, to $1.56 and $2.68, respectively."
For an analyst ratings summary and ratings history on SunTrust Banks click here. For more ratings news on SunTrust Banks click here.
Shares of SunTrust Banks closed at $22.72 yesterday.
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