NEW YORK (TheStreet) -- Shares of SunTrust Banks (STI - Get Report) are down -0.71% to $39 in pre-market trading as the bank was downgraded to "equal weight" from "overweight" at Evercore Partners (EVR) with a price target of $40 from $42.
The firm cited recent outperformance of shares and net interest margin headwinds for its rating.
Separately, TheStreet Ratings team rates SUNTRUST BANKS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate SUNTRUST BANKS INC (STI) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, increase in net income, good cash flow from operations, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Commercial Banks industry average. The net income increased by 15.1% when compared to the same quarter one year prior, going from $352.00 million to $405.00 million.
- Net operating cash flow has increased to $830.00 million or 33.65% when compared to the same quarter last year. In addition, SUNTRUST BANKS INC has also vastly surpassed the industry average cash flow growth rate of -98.56%.
- The gross profit margin for SUNTRUST BANKS INC is currently very high, coming in at 89.00%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 19.04% trails the industry average.
- SUNTRUST BANKS INC has improved earnings per share by 15.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SUNTRUST BANKS INC reported lower earnings of $2.41 versus $3.59 in the prior year. This year, the market expects an improvement in earnings ($3.07 versus $2.41).
- You can view the full analysis from the report here: STI Ratings Report