Morgan Stanley analyst Betsy Graseck on Monday upgraded SunTrust to an 'Overweight' rating, saying the company should beat earnings estimates as mortgage putback expenses decline through the end of 2012.
SunTrust will report its second-quarter results on July 20, with analysts polled by Thomson Reuters expecting a 43-cent profit, compared to EPS of 46 cents in the first quarter and 33 cents in the second quarter of 2011. Morgan Stanley estimates SunTrust will post second-quarter earnings of 45 cents a share, with full year EPS estimates of $2.13 for all of 2012 and $2.68 for 2013. SunTrust's shares closed at $24.23 Friday, returning 38% year-to-date, following a 40% decline during 2011.
The shares trade just above tangible book value, and for 9.1 times the consensus 2013 EPS estimate of $2.65. The consensus 2012 EPS estimate is $1.91. Interested in more on SunTrust? See TheStreet Ratings' report card for this stock.