Shares of U.S. Bancorp ( USB - Get Report) of Minneapolis closed at $33.11 Friday, returning 24% year-to-date, following a 2% return during 2011. The shares trade for 2.8 times tangible book value, and for 10.9 times the consensus 2013 earnings estimate of $3.03, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is $2.83. Based on a quarterly payout of 19.5 cents, USB's shares have a dividend yield of 2.36%. While U.S. Bancorp trades at much higher multiple to tangible book value than most large-cap bank stocks, its forward P/E ratio is not very high, considering that the company has achieved operating returns on average assets (ROA) ranging between 1.54% and 1.71% over the past five quarters, according to Thomson Reuters Bank Insight. Juneja on Friday raised his price target for U.S. Bancorp's shares by a dollar to $38.50, while raising his 2012 EPS estimate by a nickel to $2.86 and his 2013 EPS estimate by two cents to $3.12, and said that "our new price target assumes a price to tangible book value multiple of 3.2x versus the expected peer group multiple of 1.5x." The analyst said that "USB has greater capital return than peers given high profitability and strong capital ratios," and that JPMorgan expects a continued "favorable business mix" for the company, along with "faster growth in revenues than peers from multiple sources, above-average earnings and tangible book value growth, and lower impact from regulatory/political issues." USB data by YCharts
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Shares of Wells Fargo ( WFC - Get Report) closed at $34.03 Friday, returning 36% year-to-date, following a 10% decline during 2011. The shares trade for 1.8 times tangible book value, and for 9.3 times the consensus 2012 EPS estimate of $3.67. The consensus 2012 EPS estimate is $3.32. Based on a quarterly payout of 22 cents, the shares have a dividend yield of 2.59%. Wells Fargo has also been a solid, consistent earner when compared to other large-cap banks, with ROA ranging between 1.26% and 1.40%, over the past five quarters. Juneja's price target for the shares is $42, "reflecting 2.0x price to YE 2012 tangible book value versus the expected peer group multiple of 1.5x tangible book value." The analyst estimates that Wells Fargo will earn $3.31 a share for all of 2012, followed by 2013 EPS of $3.70. Wells Fargo's "Overweight" rating for Wells Fargo is supported by "better fee income growth opportunities with recent acquisitions of loan portfolios, expansion of capital markets and wealth management businesses as well as leading mortgage banking position," as well as expense reduction initiatives, and "lower international risk and capital markets exposure relative to peers," according to Juneja. JPMorgan expects "WFC to trade at a premium to the group because of its strong long-term track record, lower risk profile and solid growth prospects." WFC data by YCharts
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Shares of PNC Financial Services Group ( PNC - Get Report) of Pittsburgh closed at $62.05 Friday, returning 10% year-to-date, following a 3% decline during 2011. The shares trade for 1.4 times tangible book value, and for 9.1 times the consensus 2013 EPS estimate of $6.82. The consensus 2012 EPS estimate is $5.68. Based on a quarterly payout of 40 cents, the shares have a dividend yield of 2.58%. PNC suffered a hiccup during the second quarter, with mortgage putback charges of $284 million, or 54 cents, and $119 million in other charges for trust preferred redemptions and merger integration expenses related to the acquisition of RBC Bank (USA) in March. A bright spot for PNC's second quarter was an increase of its net interest margin to 4.08% from 3.90% the previous quarter, and 3.93% a year earlier Juneja's price target for PNC's shares is $78, "based on 1.7x our 2012E tangible book value, a modest premium to expected peer median tangible book value multiple of 1.5x." The analyst said that his "Overweight" rating for PNC reflects "its attractive valuation and multiple drivers of revenue growth." The company has an "actively growing fee based businesses including capital markets and treasury management as well as consumer businesses such as credit cards," he said. Juneja added that PNC's price-to-tangible-book ratio is "slightly above overall regional banks but should be trading closer to high quality banks given its track record of good revenue growth and conservative risk profile." PNC data by YCharts
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Shares of Bank of America ( BAC - Get Report) closed at $8.00 Friday, returning 44% year-to-date, following last year's 58% decline. The shares trade for 0.6 times tangible book value, and for 8.7 times the consensus 2013 EPS estimate of 92 cents. The consensus 2012 EPS estimate is 56 cents. Despite the strong year-to-date return, Bank of America's shares have been quite volatile, reflecting investors' uncertainty over the company's ultimate risk from mortgage repurchase demands, mainly springing from the company's purchase of Countrywide Financial during 2008. During the second quarter, total mortgage repurchase claims increased by 41% to $22.7 billion, from $16.1 billion in March, with private mortgage investors' putback claims climbing to $8.6 billion from $4.9 billion. Bank of America still refuses to repurchase loans from Fannie Mae ( FNMA), as the companies argue over "what constitutes a valid repurchase request," -- according to Bank of America CFO Bruce Thompson. In addition to the low market valuation for the shares, Juneja justified his "Overweight" rating for Bank of America by citing "potential for significant appreciation when earnings normalize, ongoing improvement of capital levels, and position as a leading retail and commercial banking franchise," in the united states. The analyst's price target for the shares is $11.50, "reflecting improved capital position and reduction in mortgage related issues," and "based on 0.9x price to our December 2012 tangible book value multiple, a 40% discount to expected peer median tangible book value multiple of 1.5x." Juneja estimates that Bank of America will earn 58 cents a share for all of 2012, followed by EPS of $1.02 in 2013. BAC data by YCharts
Interested in more on Bank of America? See TheStreet Ratings' report card for this stock. -- Written by Philip van Doorn in Jupiter, Fla. >Contact by Email. Follow @PhilipvanDoorn