Rating Change #3
SunTrust Banks Inc (STI - Get Report) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- SUNTRUST BANKS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, SUNTRUST BANKS INC turned its bottom line around by earning $0.93 versus -$0.17 in the prior year. This year, the market expects an improvement in earnings ($1.77 versus $0.93).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 38.9% when compared to the same quarter one year prior, rising from $180.00 million to $250.00 million.
- The gross profit margin for SUNTRUST BANKS INC is currently very high, coming in at 77.60%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 10.40% is above that of the industry average.
- STI, with its decline in revenue, slightly underperformed the industry average of 1.0%. Since the same quarter one year prior, revenues slightly dropped by 1.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, SUNTRUST BANKS INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
SunTrust Banks, Inc. operates as the holding company for SunTrust Bank, which provides various financial services in the United States. The company has a P/E ratio of 24, below the average banking industry P/E ratio of 24.8 and above the S&P 500 P/E ratio of 17.7. SunTrust Banks has a market cap of $12.55 billion and is part of the financial sector and banking industry. Shares are up 31.2% year to date as of the close of trading on Tuesday.You can view the full SunTrust Banks Ratings Report or get investment ideas from our investment research center.