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SVB Financial Upped to Strong Buy - Analyst Blog

Posted
12/26/2013 11:45:00 AM
By: Zacks.com
Referenced Stocks:BOFI;BOH;SIVB;TCBK

On Dec 26, Zacks Investment Research upgraded SVB Financial Group ( SIVB ) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

SVB Financial has been witnessing rising earnings estimates on the back of strong third-quarter 2013 results and an enhanced guidance for 2013 as well as 2014. Moreover, this financial services provider delivered positive earnings surprises in the last 4 quarters with an average beat of 10.5%. The long-term expected earnings growth rate for this stock is 10.3%.

SVB Financial reported third-quarter (ended Sep 30) results on Oct 24. Earnings per share of $1.46 beat the Zacks Consensus Estimate by a penny. Results also compared favorably with 94 cents earned in the year-ago quarter.

SVB Financial's total revenue came in at $443.0 million, growing 91.7% from $231.1 million in the prior-year quarter.

We observe that SVB Financial has an impressive growth history, with consistent improvement on the organic front. Moreover, consistent growth in loans and deposits are other positives.

The analysts are bullish on the stocks mainly due to the positive guidance provided by management. Management anticipates Net Interest Income growth in low double-digits in 2013 and high single-digits in 2014. Further, core fee income is expected to grow in high single-digits in 2013 and low double-digits in 2014.

The Zacks Consensus Estimate for 2013 increased marginally to $4.53 per share over the last 60 days. For 2014, the estimate rose 1.2% to $4.37 over the same time frame.

Other Stocks to Consider

Other West-Banks worth considering include BofI Holding, Inc. ( BOFI ), TriCo Bancshares ( TCBK ) and Bank of Hawaii Corporation ( BOH ). While BofI Holding and TriCo Bancshares carry the same Zacks Rank as SVB Financial, Bank of Hawaii holds a Zacks Rank #2 (Buy).



BOFI HLDG INC (BOFI): Free Stock Analysis Report

BANK OF HAWAII (BOH): Free Stock Analysis Report

SVB FINL GP (SIVB): Free Stock Analysis Report

TRICO BANCSHRS (TCBK): Free Stock Analysis Report

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Zacks Investment Research