This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

5 Bank Stocks Analysts Say You Should Sell Now (Update 3)

Stocks in this article: BACHCBKCFRBOHTRMKAF

5. Trustmark Corp

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Shares of Trustmark Corp (TRMK) of Jackson, Miss., is flat year-to-date , and is down about 2% over a one-year basis.

The company had $9.7 billion in total assets as of Dec. 31.

Trustmark reported fourth-quarter net income of $24.3 million, or 38 cents a share, declining from $27.0 million, or 42 cents a share, in the third quarter, and $25.2 million, or 39 cents a share, in the fourth quarter of 2010.

The fourth-quarter earnings decline mainly resulted from a $4.2 million write-down on loans that were covered by FDIC loss-sharing agreements, "as a result of loan payoffs and improved cash flow projections and lower loss expectations for loan pools." The loans were acquired when the company purchased the failed Heritage Banking Group of Carthage, Miss., in April of last year.

Trustmark's fourth-quarter ROA was 1.01% according to SNL, and the ROA has ranged as high as 1.31% over the past five quarters.

Based on a quarterly payout of 23 cents, the shares have a dividend yield of 3.8%.

Despite these relatively positive metrics, the stock saw a wave of downgrades following its results.

Morgan Keegan analyst Ebrahim Poonwala downgraded Trustmark to a "Market Perform" rating from "Outperform," saying the stock's "near term upside is likely to be limited given the macro challenges that TRMK and the banking industry face."

Poonwala lowered his 2012 EPS estimate to $1.57 from $1.60 and his 2013 estimate to $1.66 from $1.70, "with the downward revisions driven by lower fee revenues and higher overhead costs." The analyst said that although the company is "well positioned to benefit from an ongoing US economic recovery," revenue and earnings growth would be challenging, "absent a material pick-up in industry-wide loan growth and a higher interest rate environment."

KBW analyst Brian Klock also downgraded Trustmark -- to "Underperform" from "Market Perform" -- because "the core earnings power has weakened and could remain pressured this year, which should lead to price multiple contraction," and also because the company's "shares are already fully valued trading at a 13% 2013 P/E premium to peers and 21% premium to all US regionals."

3 out of 11 analysts rate the stock a sell or underperform, according to Bloomberg data. One analyst rates the stock a buy, while the remaining have a neutral rating.

The consensus price target is $23.40. Shares closed at $23.89 on Tuesday.

2 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,461.32 -153.49 -0.92%
S&P 500 1,927.11 -14.17 -0.73%
NASDAQ 4,382.8470 -36.6310 -0.83%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs