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10 Bank Stocks Beating Analysts' Price Targets


Updated with comments on First Busey from Sandler O'Neill analyst Andrew Liesch, and with information on pending second-step thrift conversions, from SNL Financial, in the Northfield Bancorp section.

NEW YORK ( TheStreet) -- TheStreet has identified a group of 10 actively traded bank stocks that have beaten analysts' consensus 12-month price targets from the end of last year.

And that's saying quite a bit, since the analysts have generally been quite "early" in setting aggressive price targets for favored banking names, based on low market multiples to book value and forward earnings estimates.

Keeping in mind that the KBW Bank Index (I:BKX) was down 31% year-to-date through Monday's close at 35.85, the "big four" U.S. banks have seen their shares turn in some rather poor performance against consensus 12-month price targets among analysts polled by FactSet:

  • Shares of Bank of America (BAC) closed at $5.25 Monday, down 61% year-to-date. The mean price target for the shares on Dec. 31, 2010, among analysts polled by FactSet, was $18.16. At this point, 10 out of 24 sell-side analysts covering Bank of America still rate the shares a buy (with 13 neutral ratings and one sell rating), and the consensus price target is $9.53.
  • Shares of Citigroup (C), declined 47% year-to-date, to close at $25.05. The consensus price target for Citi -- adjusting for the 1-for-10 reverse split on May 6 -- was $53.55 at the end of last year. Now the consensus 12-month price target is $42.39, with 16 out of 22 analysts rating the shares a buy. Four analysts have neutral ratings and two recommend selling the shares.
  • JPMorgan Chase (JPM) was down 30% year-to-date, closing at $29.16 Monday. The consensus price target for the shares was $52.62 at the end of last year. Analysts still love JPMorgan, as 23 out of 25 rate the shares a buy, with two neutral ratings. The consensus price target is now $45.91.
  • Wells Fargo (WFC) has fared best among the big four this year, with shares sliding "only" 21% through Monday's close at $24.15. The mean price target at the end of last year was $36.25. The consensus price target is now $32.57, with 20 out of 23 analysts rating the shares a buy, while two analysts have neutral ratings and one analyst recommends investors part with the share.

To come up with the following list of 10 bank stocks that beat analysts price targets, we compared Monday's closing prices with the mean price targets among analysts polled by FactSet, from Dec. 31, 2010. We limited the group to actively traded names with average daily trading volume of at least 40,000 shares. All data was provided by SNL Financial.

These 10 banks are much smaller than the big four, avoiding the pressure faced by industry giants from mortgage putback demands, Basel III capital requirements and for Bank of America, Citi and JPMorgan, worry over European exposure. Most of the 10 are also strongly capitalized.

Here are TheStreet's 10 Bank Stocks Beating Analysts' Price Targets so far during 2011:

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