SVB Financial Group
SVB Financial Group
of Santa Clara, Calif., closed at $56.80 Monday, returning 19% year-to-date, following a 10% decline during 2011.
The shares trade for 1.7 times tangible book value, according to Worldscope data provided by Thomson Reuters, and for 15 times the consensus 2013 EPS estimate of $3.74. The consensus 2012 EPS estimate is $3.47.
Analysts expect the company to report second-quarter earnings of 85 cents a share, increasing from 78 cents the previous quarter, but declining from 95 cents a year earlier.
Alexopoulos rates SVB Financial Group "Overweight," with a price target of $71, saying his firm expected a "13% annualized increase in [net interest income], up on continued growth in average earning assets and 3 bps of expected NIM expansion." The analyst also expects "period-end loan growth of $340 million, or a near-20% annualized pace, while deposit growth should rebound from flattish levels last quarter, up 10% annualized."
When SVB announces its second-quarter results, Alexopoulos is also looking "for additional color on the launch of a full-service UK branch during 2Q, as well as the pending launch of its joint venture in China."
JPMorgan estimates that SVB will earn $3.32 a share this year, followed by EPS of $3.56 in 2013.
Alexopoulos said that "of our entire coverage universe, management at SIVB has been the most active in working to take its business overseas," with the new London office, "a small presence in Israel and [an announced] joint venture with a bank in China, which it has indicated is expected to get off the ground in 2012." The analyst added that "at a time when European banks are struggling with the current market turmoil, which has shown no signs of abating, the company's UK branch rollout could not be timelier," as "SIVB has already been lending for some time in the UK, with management recently citing a strong loan pipeline and expecting strong global growth."
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