UPDATE: Bank of America Raises BB&T's PO
According to a research report published this morning, Bank of America has increased BB&T's (NYSE: BBT) PO from $32 to $33.
In the report, Bank of America said, "BBT is often pegged by the market as a potential consolidator, but we think any bank deals executed in 2012 will likely be quite small (<$5bn in assets) – removing “deal risk” as an overhang for the stock near-term. Further, many investors and press reports have pegged a potential deal for SNV as BBT's next “big deal.” Our proprietary M&A analysis suggests that at even a 37% market premium, 25% premium to TBV, and a lifetime loan mark of 24%, the pro forma economics to BBT would be fairly solid. Our analysis implies that under these parameters, the IRR would be 11%, EPS accretion to 2013 would be 25%, and dilution of 2% to TBV."
Bank of America maintains its Neutral rating on BB&T, which closed yesterday at $32.19.
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