BB&T Hits New 52-Week High - Analyst Blog

Shares of BB&T Corporation BBT reached a new 52-week high, touching $40.81 on Mar 25. However, the stock closed the session at $40.77, reflecting a solid return of 34.2% in a year's time. The trading volume for the session was 6.9 million shares.

Despite the strong price appreciation, this Zacks Rank #3 (Hold) stock has plenty of upside left, given the positive estimate revisions it witnessed over the past 90 days. Further, the long-term expected earnings per share growth rate for this regional bank now stands at 7.1%.

Growth Drivers

Decent stress test results and strong fourth-quarter 2013 earnings, including improvement in credit quality and disciplined expense management, primarily drove the stock price.

On Mar 20, BB&T released the results of its annual company-run stress test, which the bank cleared successfully. This signals that the bank is in a good position to withstand severe economic downturns going forward. Notably, this result exhibited that BB&T Tier 1 capital is in the top quartile of all the 30 banks that underwent the test.

Further, on Jan 16, BB&T came out with fourth-quarter 2013 earnings of 75 cents per share, beating the Zacks Consensus Estimate by 4.2%. The reported figure was also above 71 cents earned in the prior-year quarter.

Results were aided by lower non-interest expenses, fall in the provision for credit losses, partially offset by a decline in the top line. Further, the quarter witnessed increase in average loans held for investment. Also, capital ratios and the profitability ratios improved.

Estimate Revisions Show Potency

Over the last 90 days, the Zacks Consensus Estimate for 2014 has advanced 1% to $3.05 per share. For 2015, the estimate moved up around 0.6% to $3.35 per share over the same time frame.

Some better-ranked stocks in this space include BankUnited, Inc. BKU, Comerica Inc. CMA and Fifth Third Bancorp FITB. All of these carry a Zacks Rank #2 (Buy).