Market Overview

Bernstein Turns Bullish On 2 Regional Banks

Share:
Bernstein Turns Bullish On 2 Regional Banks
Related MTB
48 Biggest Movers From Yesterday
34 Stocks Moving In Thursday's Mid-Day Session
Tracking Warren Buffett's Berkshire Hathaway Portfolio - Q4 2018 Update (Seeking Alpha)
Related STI
Flashing Green: Global Stocks Follow U.S. Market Higher, With Cisco Reporting Later
Shutdown Avoided? Stocks Get Early Boost With Activision Blizzard Earnings Later

The bullish case for two regional banks, SunTrust Banks, Inc. (NYSE: STI) and M&T Bank Corporation (NYSE: MTB), can now be made after a pullback in both stocks, according to Bernstein.

The Analyst

Bernstein's John McDonald upgraded SunTrust Banks from Market Perform to Outperform with a price target lifted from $75 to $76.

The analyst upgraded M&T Bank from Market Perform to Outperform with a price target lifted from $200 to $210.

The Thesis

Both SunTrust and M&T are "quality" franchises backed by solid management teams that positioned their respective companies to take advantage of rising short rates, a strong U.S. economy and a more favorable regulatory backdrop for smaller banks, McDonald said in the Wednesday upgrade note.

In SunTrust's case, investors should be bullish on stock for the following reasons, McDonald said:

  • Expectations for better rate sensitivity than what was implied in recent disclosures.
  • Room for continued efficiency improvements above the 60-percent 2019 target.
  • Strong exposure to the consumer lending segment.
  • A more "internally focused" strategy implies less risk of an unfavorable M&A deal. 

The case for M&T's stock is is based on the following factors, the analyst said: 

  • M&T's recent weakness is attractive for a "quality compounder."
  • A track record of top-tier shareholder returns.
  • Attractive capital management and solid credit.
  • A focus on profitability over growth.

Price Action

SunTrust shares were down 1.12 percent at the time of publication Wednesday afternoon, while M&T shares were down nearly 1 percent. 

Related Links:

Wedbush Turns Bullish On Comerica, Says Bank Is A Sector Standout

Hope Bancorp's Earnings Headwinds Likely To Continue, Analyst Says

Latest Ratings for MTB

DateFirmActionFromTo
Jan 2019UBSUpgradesSellNeutral
Jan 2019Morgan StanleyMaintainsEqual-WeightEqual-Weight
Oct 2018BairdUpgradesNeutralOutperform

View More Analyst Ratings for MTB
View the Latest Analyst Ratings

Posted-In: banks Bernstein John McDonald regional banksAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga

 

Related Articles (MTB + STI)

View Comments and Join the Discussion!

Oppenheimer Drops Bearish GE Thesis On Improving Balance Sheet Outlook

Berenberg Says To Buy The Dip In Carnival: 'The Guidance For 2018 Remains Strong'