Bank of America Sees Three Reasons to Buy Texas Capital Bancshares Ahead of 3Q Results

In a report published Tuesday, Bank of America analyst Ebrahim H. Poonawala reiterated a Buy rating and $68.00 price target on

. In the report, Bank of America noted, “We believe 3Q results should serve as a catalyst for a material re-rating higher in TCBI with the stock currently trading at a 1.2X P/E discount to the median of high growth peers. Applying the 17.5x peer median P/E multiple to TCBI implies approximately 8% potential upside. We are also raising our 3Q EPS estimate to $0.78 from $0.76 and FY14 EPS estimate to $2.87 from $2.82 primarily driven by higher than previously forecasted loan growth. Our 3Q EPS estimate is 4.4% above the Street. While higher interest rates should serve as a tailwind to the stock given TCBI's asset sensitivity, we believe that TCBI offers additional catalysts beyond higher rates to drive stock outperformance. We see three catalysts during the upcoming 3Q results that could drive stock outperformance.” Texas Capital Bancshares closed on Monday at $57.06.