Will This Price Target Increase Help BB&T (BBT) Stock Today?

Story updated at 10 a.m. to reflect market activity.

NEW YORK (TheStreet) -- BMO Capital Markets raised its price target for BB&T (BBT) to $40 from $38 Friday, reiterating its "market perform" rating.

Shares of BB&T gained 0.9% to $38.28 in morning trading.

The analyst firm also raised its EPS estimates for the regional bank through 2015. BMO analysts expect BB&T to report earnings of $2.75 a share for full year 2014, up from its previous estimate of $2.70 a share. For 2015 the analysts now expect earnings of $3.05 a share, up from $3.00 a share.

The increase price target and EPS estimates follow an upbeat investor day earlier in the week, according to BMO analysts Lana Chan, Peter J. Winter, and Oliver Brassard.

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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. Along with this, the net profit margin of 18.70% is above that of the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 12.9%. 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).
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • 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 -97.19%.
  • You can view the full analysis from the report here: BBT Ratings Report

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