NEW YORK (TheStreet) -- Shares of SunTrust Banks (STI) are falling by 1.53% to $43.20 in Monday's early morning trading session after analysts at Oppenheimer downgraded to company to "perform" from "outperform" and removed their $51 price target.
"Bank fundamental trends are more staid and boring than we have ever seen them in 30 years of covering stocks," the firm said.
Net interest and fee revenues have been flat since mid-2011, and analysts expect second quarter of 2015 to be more of the same, according to the analyst note.
Financial institution stocks have been "zigging a lot recently," and analysts advise investors to "zag toward a bit more caution."
SunTrust Banks provides various financial services in the U.S.
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 solid stock price performance, growth in earnings per share, increase in net income, expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow."
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.
- SUNTRUST BANKS INC has improved earnings per share by 6.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, SUNTRUST BANKS INC increased its bottom line by earning $3.23 versus $2.41 in the prior year. This year, the market expects an improvement in earnings ($3.26 versus $3.23).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Commercial Banks industry average. The net income increased by 5.9% when compared to the same quarter one year prior, going from $405.00 million to $429.00 million.
- The gross profit margin for SUNTRUST BANKS INC is currently very high, coming in at 91.05%. 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 20.53% trails the industry average.
- STI, with its decline in revenue, slightly underperformed the industry average of 0.0%. Since the same quarter one year prior, revenues slightly dropped by 1.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full analysis from the report here: STI Ratings Report