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

SunTrust Rises on Goldman's Glowing Report

NEW YORK ( TheStreet)-- SunTrust Banks (STI - Get Report)' shares got a lift from Goldman Sachs on Tuesday as analysts cited it as a neutral-rated stock that could outperform during second quarter earnings season.

Shares of SunTrust rose more than 2% early Tuesday before erasing some of those gains by late morning. Still, shares were outperforming those of both Regions Financial (RF) and Fifth Third Bancorp (FITB), Goldman's other two top picks for the second quarter earnings season, both of which are buy-rated. The bank earnings season kicks off Friday, when JPMorgan Chase (JPM)and Wells Fargo (WFC) report.

SunTrust shares still offer upside for investors looking to capitalize on what are widely expected to be strong second quarter mortgage banking results, according to a report on mortgage banking published Tuesday by Goldman's analysts.

While Goldman's analysts acknowledge that "mortgage banking is a well known source of strength for banks in the low-rate environment," they argue "the tailwind could be even better and longer than expected." That's because some $5 trillion worth of mortgages, or 60% of the total outstanding, remain eligible for refinancing, according to Goldman. Industry analysts estimate only 20% of that total will actually refinance, leaving lots of room for a positive surprise, the report contends.

Such a surprise would benefit Wells, Fifth Third and SunTrust above all, due to "market share, footprint and revenue contribution," according to the report.

SunTrust shares also look attractive from a valuation standpoint, according to a separate Goldman report published Tuesday that focused broadly on second quarter earnings. The report states that SunTrust trades at 95% of tangible book value and 9.2 times 2013E earnings estimates, equating to 26% and 7% discounts to its regional peers.

-- Written by Dan Freed in New York.

Follow this writer on Twitter.
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
STI $41.74 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs