This Day On The Street
Continue to site
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

8 Post-Downgrade Bank Stock Bargains

4. SunTrust Banks
Shares of SunTrust Banks (STI - Get Report) of Atlanta closed at $23.02 Friday, returning 31% year-to-date, after a 40% decline during 2011.

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

Get Adobe Flash player

The shares trade for 0.9 times their reported March 31 tangible book value of $25.49, and for nine times the consensus 2013 earnings estimate of $2.65, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is $1.90.

Goldman Sachs analyst Ryan Nash has a neutral rating for SunTrust, even though he said the shares were "compelling" on June 13, saying he expects "major improvement the next few quarters" in the bank's "environmental cost" as it continues to work through problem loans and maintain and sell repossessed property. Nash also expects high refinancing volume from President Obama's expansion of the Home Affordable Refinance Program, or HARP 2.0, to "help fund near-term put-backs" of securitized mortgage loans.

HARP 2.0 allows mortgage loan borrowers with loans held by Fannie Mae (FNMA) or Freddie Mac (FMCC) to refinance their homes at today's historically low rates, no matter how much the value of the collateral property has declined.

Nash reiterated his neutral rating for SunTrust because "put-backs remain unpredictable," while saying that his firm's "analysis sees $800mn of further put-back losses," while SunTrust has estimated another $600 million in mortgage repurchase losses. In support of the neutral rating, the analyst also cited "outsize margin pressure," expecting SunTrust's net interest margin to compress by 27 basis points, versus "consensus of 13bp."

Interested in more on SunTrust? See TheStreet Ratings' report card for this stock.

4 of 7

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
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!
BAC $15.56 -0.51%
C $52.80 -0.19%
KEY $14.11 -0.84%
MS $37.05 -0.83%
STI $40.63 0.40%


DOW 18,037.97 -42.17 -0.23%
S&P 500 2,108.92 -8.77 -0.41%
NASDAQ 5,060.2460 -31.8390 -0.63%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs