We issued an updated research report on
SunTrust Banks, Inc.
) on May 28, 2014. The company reported better-than-expected
first-quarter results. Efficient capital deployment activities and
prudent expenses management are the company's strengths.
Nevertheless, we remain concerned about the overall subdued
economic scenario and regulatory pressure.
SunTrust released its first-quarter 2014 earnings on Apr 21.
Results not only surpassed the Zacks Consensus Estimate by 9.0% but
also rose 15.9% year over year. Results benefited from lower
provision for credit losses and prudent expense management,
partially offset by decline in revenue.
SunTrust is an asset for yield-seeking investors. Given its strong
capital position, we believe that the company will consistently
return capital to shareholders in form of dividends and shares
buybacks in the quarters to follow. Further, the company remains
focused on measures to improve revenues and cut costs, which will
aid efficiency improvement in the long run.
Following the impressive first-quarter results, the Zacks Consensus
Estimate for 2014 increased 3.3% to $3.13 per share over the last
60 days. Further, for 2015, the Zacks Consensus Estimate climbed
1.0% to $3.32 per share over the same time period.
On the flip side, the company's considerable exposure to commercial
and residential loan portfolios keeps us skeptical. Though the
housing market has recovered, any further deterioration in real
estate prices will pose a problem to the company.
Currently, SunTrust has a Zacks Rank #3 (Hold).
Stocks That Warrant a Look
Some better-ranked banks include
BofI Holding, Inc.
Central Pacific Financial Corp.
CVB Financial Corp.
). All these stocks sport a Zacks Rank #1 (Strong Buy).
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SUNTRUST BKS (STI): Free Stock Analysis Report
CENTRAL PAC FIN (CPF): Free Stock Analysis
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BOFI HLDG INC (BOFI): Free Stock Analysis
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