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TheStreet Open House

10 Bank Stocks You Need to Watch During Earnings Season (Update 1)

Stocks in this article: BAC C JPM WFC RF HBAN FITB KEY BK STI COF FNFG PNC STT FHN

7. SunTrust
Shares of SunTrust (STI) of Atlanta closed at $24.23 Friday, returning 38% year-to-date, following a 40% decline during 2011.

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The shares trade just above tangible book value, and for 9.1 times the consensus 2013 EPS estimate of $2.65. The consensus 2012 EPS estimate is $1.91.

SunTrust will report its second-quarter results on July 20, with analysts expecting a 43-cent profit, compared to EPS of 46 cents in the first quarter and 33 cents in the second quarter of 2011.

Jefferies analyst Ken Usdin rates SunTrust a "Buy," with a $28 price target, saying on Wednesday that "Investors remain focused on credit-related expenses, especially following mortgage repurchase preannouncements" from First Horizon and PNC. Usdin expects "continued directional improvement, but do not believe the magnitude of the decline a $15 million decline in credit costs from the first quarter will be enough on its own for the stock to break out."

Usdin added that "the other big issue is that large swap maturities will remove $35mm of net interest income this quarter," although "we believe investors are up to speed on the swap roll-off, which should minimize the risk of sticker shock from the 10bp impact it will have on STI's net interest margin."

Jefferies estimates that SunTrust will post second-quarter earnings of 42 cents a share, with EPS of $1.80 for all of 2012 and $2.65 in 2013.

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

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