BankUnited Touches New 52-Week High - Analyst Blog

Shares of BankUnited, Inc. BKU crafted a new 52-week high, touching $34.83 in the last hour of the trading session on Mar 31. The closing price of this major regional bank represents a return of 39.9% over the last one year. The trading volume for the session was around 0.7 million shares.

Despite the strong price appreciation, this Zacks Rank #2 (Buy) stock has plenty of upside left, given its strong estimate revisions over the last 60 days.

Growth Drivers

Impressive fourth-quarter 2013 results that included a rise in fee income, along with growth in loan and deposit balances, were the primary growth drivers for BankUnited. Further, the long-term expected earnings growth rate for the company is 8.9%.

On Jan 23, BankUnited reported fourth-quarter earnings at 50 cents per share, surpassing the Zacks Consensus Estimate by 8.7%. Results benefited from growth in non-interest income (up 6.4% from the prior-year quarter).

Moreover, as of Dec 31, 2013, net loans were $9.1 billion, up 61.5% year over year. Further, total deposits increased 23.4% to $10.5 billion.

On the flip side, rising expenses and a decline in net interest income dragged down the fourth-quarter results. Additionally, capital ratios and profitability deteriorated.  

Estimate Revisions Show Strength

Over the last 60 days, the Zacks Consensus Estimate for 2014 advanced nearly 1% to $1.81 per share while for 2015, it rose by a penny to $2.11 per share.

Other major banks worth considering include Fifth Third Bancorp FITB, KeyCorp. KEY and Wells Fargo & Company WFC. All these stocks carry the same Zacks Rank as BankUnited.