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 To 'Outperform Peers Going Forward': FBR

NEW YORK ( TheStreet) -- SunTrust (STI - Get Report) of Atlanta is set to "garner a higher multiple and outperform peers going forward," according to FBR analyst Paul Miller.

SunTrust's shares closed at $29.05 Friday. The shares traded for 1.1 times their reported March 31 tangible book value of $26.33, and for 10.0 times the consensus 2014 earnings estimate of $2.90 a share, among analysts polled by Thomson Reuters. The consensus 2013 EPS estimate is $2.68.

Miller on Monday upgraded SunTrust to an "outperform" rating from a "market perform" rating and raised his price target for the shares to $37 from $30.00. The analyst said in a note to clients that the bank's "meaningful progress" in working through mortgage repurchase demands, resolution of credit problems and "strong fee income platform," should allow its share price to reflect a higher multiple to tangible book value.

Miller's price target for SunTrust equates to 1.3 times an estimated year-end 2013 tangible book value of $28.50.

SunTrust reported first-quarter net income available to common shareholders of $340 million, or 63 cents a share, compared to $350 million, or 65 cents a share, in the fourth quarter, and $245 million, or 46 cents a share, in the first quarter of 2012. Please see TheStreet's earnings coverage for a detailed review of the company's financial results.

A great deal of coverage for regional banks this earnings season has centered around the decline in mortgage revenue from elevated fourth-quarter levels, as refinancing volume has declined, and rising long-term market rates have led to a decline on lenders' gains on the sale of new mortgage loans, mainly to Fannie Mae (FNMA) and Freddie Mac (FMCC). SunTrust's mortgage production revenue in the first quarter was $159 million, declining from $241 million the previous quarter, but increasing from $63 million a year earlier.

The most positive developments for SunTrust were a continued decline in credit costs, and further signs that the company has put its risk of losses on legacy mortgage repurchase demands in the rear view mirror.

SunTrust's pretax income was directly boosted by a decline in the provision for credit losses to $212 million in the first quarter from $328 million in the fourth quarter and $317 million in the first quarter of 2012. The provision is the amount added to loan loss reserves each quarter, to cover anticipated losses.

1 of 3

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 $42.13 0.93%
AAPL $93.64 -0.11%
FB $118.57 0.84%
GOOG $698.21 0.75%
TSLA $241.80 0.43%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs