2. Regions Financial
Shares of Regions Financial (RF) of Birmingham, Ala., closed at $6.59 Friday, returning 54% year-to-date, after a 38% decline last year.
The shares trade for nine times the consensus 2013 EPS estimate of 75 cents.
The company owes $3.5 billion in TARP money, which it expects to repay in April.Regions on March 19 commenced a $900 million common stock offering, and said that including the offering's net proceeds of $875 million, the money from its pending sale of Morgan Keegan to Raymond James Financial (RJF) sale and a full redemption of TARP preferred shares held by the U.S Treasury, that its Tier 1 common equity ratio its Tier 1 common equity ratio, based on fourth-quarter numbers, would be a strong 9.51%. The company will report its first-quarter results on April 24, with a consensus EPS estimate of seven cents. Deutsche Bank analyst Matt O'Connor rates Regions a "Buy," and on Friday raised his price target for shares by a dollar, to $7.50. O'Connor's first-quarter outlook for Regions "reflects lower net interest income given lower earning assets (continued run-off of RF's investor real estate and home equity portfolios) and higher mortgage prepayments in the securities book. However, offsets to these [net interest margin] headwinds are opportunities lower funding costs, reduce excess cash levels and continued pricing discipline on loans." Interested in more on Regions Financial? See TheStreet Ratings' report card for this stock.
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