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Stocks Under $10 with 50-100% upside potential - 14 days FREE!

10 Big Bank Stocks Gearing Up for Third-Quarter Earnings (Update 3)

Stocks in this article: BAC WFC RF HBAN KEY FITB USB STI BBT COF FNFG PNC

5. SunTrust
Shares of SunTrust (STI) of Atlanta closed at $28.26 Friday, returning 61% year-to-date, following a 40% decline during 2011.

The shares trade for 1.2 times tangible book value, and for 10.1 times the consensus 2013 EPS estimate of $2.81. The consensus 2012 EPS estimate is $3.31.

Based on a quarterly payout of five cents, the shares have a dividend yield of 0.71%.

For the 12-month period ended June 30, the company's ROA was 0.46%, and its ROE was 4.00%.

The consensus among analysts is for SunTrust to report a third-quarter profit of $1.83 cents (including several extraordinary items), increasing from 50 cents the previous quarter, and 39 cents a year earlier.

SunTrust on Sept. 6 announced a number of steps to optimize its balance sheet, in light of new regulatory and take advantage of its long-term investment in Coca Cola (KO) shares.

The company accelerated two forward purchase agreements to sell its Coke shares, while also transferring $3 billion in portfolio loans to held-for-sale, and said that the moves, along with other actions, would lead to a pretax third-quarter gain of $1.9 billion, or $1.2 billion after taxes.

Juneja rates SunTrust "Overweight," and on Friday raised his price target for the shares to $33.50 from $31.50, and called the company "one of the biggest beneficiaries from housing market recovery," as it "has had an unusually large drag from mortgage related issues on several fronts versus peers."

"As the housing market recovers, SunTrust's earnings should show strong benefit," Juneja said. "In addition, we expect management to remain focused on lowering expenses and improving its efficiency ratio."

The analyst added that the company's "valuation is also attractive as STI trades below regional peers based on tangible book multiple."

STI Chart STI data by YCharts

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

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