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

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

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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