People's United Hits A 52-Week High - Analyst Blog


Shares of  People's United Financial Inc. ( PBCT ) soared to a new 52-week high, touching $14.38 in the first half of the trading session on Jun 20. The closing price of the stock was $14.25, reflecting a solid year-to-date return of 17.5%. The trading volume for the session was 6.7 million shares, significantly up from the 3-month average of 3.5 million shares.

Over the last 60 days, the forward year estimate of this Zacks Rank #3 (Hold) stock was revised downwards by a penny. However, People's United's scope for revival remains strong, given the expected earnings growth of 6.5%.

Growth Drivers

People's United's consistently improving asset quality primarily stimulated the strong price appreciation of the stock. In addition, the company's announcement of the 21st consecutive annual dividend hike by a cent to 65 cents per share seems to have enhanced investor confidence, thereby boosting stock prices.

People's United's first-quarter 2013 earnings of 18 cents per share came in line with the Zacks Consensus Estimate. Lower nonperforming assets as well as growth in loans and deposits were the positives for the quarter. Nevertheless, decreasing revenues and steep expenses acted as headwinds.  

Going forward, a rise in loans and deposits will likely boost the company's results. Moreover, People's United is trying to overcome the sluggish economic recovery through strategic acquisitions. Additionally, healthy capital deployment activity will boost investor confidence. Nevertheless, the recent regulatory issues, decline in top line and rising expenses remain major concerns.

Estimate Revisions

In the last 60 days, the Zacks Consensus Estimate for 2013 decreased 1.3% to 77 cents. However, for 2014, the Zacks Consensus Estimate advanced 2.3% to 89 cents per share over the same time frame.

Other Stocks to Consider

Better performing stocks in the same sector include First Pactrust Bancorp Inc. ( BANC ), Great Southern Bancorp ( GSBC ) and Mutualfirst Fincl Inc ( MFSF ) - all of which carry a Zacks Rank #1 (Strong Buy).

FIRST PACTRUST (BANC): Free Stock Analysis Report

GREAT SOUTH BCP (GSBC): Free Stock Analysis Report

MUTUALFIRST FIN (MFSF): Free Stock Analysis Report

PEOPLES UTD FIN (PBCT): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: BANC , GSBC , MFSF , PBCT

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