This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

SunTrust To 'Outperform Peers Going Forward': FBR

Stocks in this article: STI

NEW YORK ( TheStreet) -- SunTrust (STI) 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

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

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