This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
TheStreet Open House

SunTrust: Financial Winner

Stocks in this article: STI I:BKX

NEW YORK ( TheStreet) -- SunTrust (STI - Get Report) was the winner among the largest U.S. banks on Tuesday, with shares rising 3% to close at $28.89.

The broad indexes ended mixed as the rhetoric in Washington over the coming showdown between President Obama and the Republican leadership of the House of Representatives grew nearer.

After the president said at a press conference on Monday that "America cannot afford another debate with this Congress about whether or not they should pay the bills they've already racked up," Speaker of The House John Boehner (R., Ohio) said in a statement that "raising the debt limit without making serious spending cuts and reforms could result in another credit downgrade for the United States," referring to the possibility of a rate cut by Fitch Ratings.

The KBW Bank Index (I:BKX) rose 1% to 53.31, with all but four of the 23 index components showing gains, as investors awaited a slew of earnings reports over the coming days. JPMorgan Chase, Goldman Sachs, Bank of New York Mellon and Comerica are all scheduled to announce their fourth-quarter results before the market opens on Wednesday.

SunTrust


SunTrust's shares trade for 1.1 times their reported Sept. 30 tangible book value of $25.72, and for 10.74 times the consensus 2013 earnings estimate of $2.69 a share, among analysts polled by Thomson Reuters. The consensus 2014 EPS estimate is $2.97.

The company will announce its fourth-quarter results on Jan. 18, with analysts expecting a profit of 61 cents a share, declining from $1.98 in the third quarter, but increasing from 13 cents in the fourth quarter of 2011. Both prior periods reflected one-time items.

During the third quarter, SunTrust strengthened its balance sheet by selling its holdings of Coca-Cola (KO) shares, for a pre-tax gain of $1.9 billion. SunTrust also reported a $371 million provision for mortgage repurchase claims during the third quarter, saying that the move had boosted its putback reserves "to a level that is expected to cover the estimated losses on loans sold to Government Sponsored Enterprises (GSEs) prior to 2009." The fourth-quarter 2011 results reflected an elevated mortgage putback provision, as well as a negative mortgage servicing rights valuation adjustment, in light of the expected effect of the expanded Home Mortgage Refinance Program, or HARP 2.0.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link 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

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, 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
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,416.85 +225.48 1.31%
S&P 500 2,021.25 +19.09 0.95%
NASDAQ 4,683.4070 +45.4130 0.98%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs