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!

BB&T Not Ready to Outperform

NEW YORK (TheStreet) -- Despite its solid reputation for operational performances, depositing all of my faith in BB&T (BBT) has never been an easy thing to do.

Although management has worked diligently to streamline the bank's operations while also bringing synergies to newly acquired BankAtlantic, I've never bought in to the premium that BB&T shares carried relative to other well-run regional banks like Suntrust (STI) and PNC Financial (PNC). Given the underperformance in BB&T's results, particularly in pre-provision net revenue (PPRN), I believe the stock was always expensive.

PPRN is the financial sector's equivalent of operating income. Investors are correct in pointing out that BB&T does post better revenue results than some of its larger global rivals. Even so, better-than-expected revenue growth has become a meaningless metric in this industry. Besides, the Street doesn't seem to mind the across-the-board revenue decline from all of the large money centers, including Wells Fargo (WFC) and JPMorgan Chase (JPM).

Thursday, BB&T will report fourth-quarter results, and management will have yet another chance to prove skeptics wrong. The Street will be looking for earnings-per-share of 72 cents on revenue of $2.37 billion, which would represent 6.3% year-over-year revenue decline. But as I've said, whether good or bad, it's pointless to measure these banks on revenue.

To that end, for BB&T stock to make sense today management needs to show a strong outperformance in areas like net interest margin. A strong result there would increase BB&T's adjusted income and put to rest some concerns about poor capital utilization relative to the bank's debt. And this is especially important given that BB&T is still in the midst of incorporation BankAtlantic into the fold.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
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 17,018.88 -20.61 -0.12%
S&P 500 1,989.44 -2.93 -0.15%
NASDAQ 4,540.0160 +7.9120 0.17%

Brokerage Partners

Rates from Bankrate.com

  • 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