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TheStreet Open House

Will BB&T (BBT) Stock Receive A Boost From This Analyst Upgrade?

NEW YORK (TheStreet) -- BB&T Corp. (BBT) was upgraded to "outperform" from "market perform" with an increased price target range of $41-$43 from $39-$41 at Wells Fargo  (WFC)

The firm believes the recent under performance of shares and lower investor expectations for the second half of 2014, following the company's second quarter results, create a buying opportunity.

Shares of BB&T are down -0.08% to $36.42 in pre-market trade.

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Separately, TheStreet Ratings team rates BB&T CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate BB&T CORP (BBT) 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 expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The gross profit margin for BB&T CORP is currently very high, coming in at 89.15%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, BBT's net profit margin of 18.70% significantly trails the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 8.2%. Since the same quarter one year prior, revenues slightly dropped by 8.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • BB&T CORP's earnings per share declined by 24.7% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, BB&T CORP reported lower earnings of $2.18 versus $2.70 in the prior year. This year, the market expects an improvement in earnings ($2.77 versus $2.18).
  • In its most recent trading session, BBT has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • Net operating cash flow has significantly decreased to $245.00 million or 86.70% when compared to the same quarter last year. Despite a decrease in cash flow BB&T CORP is still fairing well by exceeding its industry average cash flow growth rate of -97.88%.

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