Shares of Regions Financial have now returned 70% year-to-date, following a following a 38% decline during 2011.
The shares trade for 1.1 times their reported June 30 tangible book value of $6.69, and for nine times the consensus 2013 EPS estimate of 81 cents. The consensus 2012 EPS estimate is 72 cents.
The Birmingham, Ala., lender will announce its third-quarter results on Oct. 23, with a consensus EPS estimate of 21 cents, increasing from 20 cents the previous quarter, and eight cents a year earlier.
Analysts will be looking for a relatively "clean quarter" for the company, after a major transition during the first half of 2012. During the second quarter, Regions redeemed all $3.5 billion in preferred stock held by the government for bailout assistance through the Troubled Assets Relief Program, or TARP, after selling its Morgan Keegan subsidiary and raising $900 million in common equity during the first quarter.
Usdin rates Regions Financial a "Hold," with an $8.00 price target, and said on Oct. 2 that he expects the company's "pre-provision [for loan losses] earnings to come under higher scrutiny this quarter given that it is harder to impress on credit after last quarter's beat," when the company's provision for loan loss reserves was a very low $26 million, or just 0.14% of total loans.
"This could work against RF," Usdin said, "as 2Q had a number of one-timers that may not be teased out appropriately in Street models."
Guggenheim analyst Marty Mosby last month said that Regions was among the regional banks that were best-positioned to defend their net interest margins at this point in the economic cycle.
The company's second-quarter net interest margin expanded to 3.16%, from 3.09% the previous quarter, and 3.07% a year earlier. Mosby estimates that the margin will expand by another nine basis points through the end of 2013.
Mosby rates Regions a "Buy," with a price target of $9.25. The analyst expects the company to improve its "quarterly earnings run rate to above $0.20 before year-end, pushing potential upside substantially higher."
Interested in more on Regions Financial? See TheStreet Ratings' report card for this stock.
Written by Philip van Doorn in Jupiter, Fla.