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
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

5 Buy-Rated Banks From Guggenheim

Stocks in this article: JPMWFCRFUSBCOFSTIBBTMTB

NEW YORK ( TheStreet) -- Bank stock investors need to look beyond current bargains and focus on companies with strong prospects for earnings growth.

As discussed in today's article on banks that are cheaply priced to 2013 earnings estimates, the "bargain shopping" approach of looking for names trading for low multiples to tangible book values has worked for investors during the current bank stock recovery, but going forward, earnings growth will be the name of the game for long-term investors.

Guggenheim Securities analyst Marty Mosby on Wednesday reiterated his "Buy" ratings for three "high quality banks that can generate earnings growth," while upgrading two others that are going through major transitions to "Buy" ratings, and downgrading three that "have recently experienced significant favorable price moves" to neutral ratings.

First the downgrades:

  • Mosby downgraded BB&T (BBT) to a neutral rating from a "Buy" rating, while leaving his price target unchanged at $34, saying that that BB&T's closing price on Tuesday of $31.37 already reflects the Winston-Salem, N.C., lender's earnings potential for 2013. BB&T's shares have returned 25% year-to-date, and the shares trade for 11 times the consensus 2013 earnings estimate of $2.96 a share, among analysts polled by Thomson Reuters. Mosby estimates BB&T will earn $2.60 a share this year, followed by EPS of $3.07 in 2013.
  • Guggenheim downgraded SunTrust (STI) of Atlanta to neutral from "Buy," with an price unchanged price target of $26, with Mosby also saying the company's 2013 EPS potential was baked-into the share price. SunTrust has returned 40% year-to-date, closing Tuesday at $24.65. The shares trade for nine times the consensus 2013 EPS estimate of $2.69. Mosby estimates the lender will earn $1.80 a share during 2012, followed by 2013 EPS of $2.25.
  • Mosby also downgraded M&T Bank (MTB) of Buffalo, N.Y., to a neutral rating from a "Buy," while raising his price target by a dollar to $96, saying that "M&T Bank continues to be a safe haven with little downside, in our view, but as the economy continues to improve we would value this downside protection less." M&T returned 14% year-to-date through Tuesday's close at $86.26. The shares trade for 12 times the consensus 2013 EPS estimate of $7.39. Mosby estimates M&T will earn $6.95 a share this year, followed by 2013 EPS of $8.00.

The following five bank stocks were either upgraded or had their "Buy" ratings reiterated by Mosby:

1 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 17,810.06 +91.06 0.51%
S&P 500 2,063.50 +10.75 0.52%
NASDAQ 4,712.97 +11.1030 0.24%

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