UPDATE: Bank of America Initiates Coverage on Fulton Financial

According to a research report published earlier today, Bank of America has initiated Fulton Financial FULT with an Underperform rating and $9.50 PT. In the report, Bank of America said, “FULT is a $16.4bn in asset commercial bank headquartered in Lancaster, PA and operating in five Mid-Atlantic states. We expect FULT to underperform peers as we believe the Street overestimates core earnings power beyond reserve release and valuation does not reflect EPS that is less defensible and of lower quality relative to the group. Our 2012 and 2013 EPS estimates of $0.75 and $0.87 are 4% below the Street and we expect consensus misses and negative earnings revisions to pressure the stock. We find FULT fairly valued at 12x blended 2012E and 2013E EPS and question what investors will pay for reserve-release-weighted EPS growth, a risk to current P/E multiple (13.8x).” Fulton Financial closed yesterday at $10.39.