Story updated at 10 a.m. to reflect market activity.
Shares of BankUnited gained 1.1% to $34.27 in morning trading.
Morgan Stanley analysts set a price target of $39 for the regional bank. The analysts said BankUnited's stock appears undervalued given its potential for growth.Must read: Warren Buffett's 10 Favorite Stocks STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. ---------- Separately, TheStreet Ratings team rates BANKUNITED INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation: "We rate BANKUNITED INC (BKU) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its expanding profit margins, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and premium valuation." Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The gross profit margin for BANKUNITED INC is currently very high, coming in at 81.02%. Regardless of BKU's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BKU's net profit margin of 26.93% significantly outperformed against the industry.
- Net operating cash flow has significantly increased by 62.73% to -$24.30 million when compared to the same quarter last year. Despite an increase in cash flow of 62.73%, BANKUNITED INC is still growing at a significantly lower rate than the industry average of 394.92%.
- BKU, with its decline in revenue, slightly underperformed the industry average of 11.7%. Since the same quarter one year prior, revenues fell by 12.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- BANKUNITED INC's earnings per share declined by 18.0% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, BANKUNITED INC reported lower earnings of $2.01 versus $2.06 in the prior year. For the next year, the market is expecting a contraction of 9.9% in earnings ($1.81 versus $2.01).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Commercial Banks industry. The net income has decreased by 16.2% when compared to the same quarter one year ago, dropping from $62.50 million to $52.39 million.
- You can view the full analysis from the report here: BKU Ratings Report
Check Out Our Best Services for Investors
Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts
Check Out Our Best Services for Investors
Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
Every recommendation goes through 3 layers of intense scrutinyquantitative, fundamental and technical analysisto maximize profit potential and minimize risk.
Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.