Deutsche Bank (DB) downgraded its rating on SunTrust Banks Inc.
(NYSE:STI) to "Hold" from "Buy", citing factors that suggest less upside
in the near term.
Matt O'Connor, an analyst at DB, believes upside to STI's earnings
(and the stock) could be meaningful longer term reflecting lower
However, expenses were higher than expected in the fourth quarter and may not decline meaningfully until late 2012, he noted.
Also, "NIM pressure from asset repricing and swap roll off could
total 10-15bps in 1H12. These factors, plus the 20%-plus move in the
stock YTD (nearly 40% from recent Dec lows) suggest less upside in the
near term, in our view, O'Connor said.
O'Connor has a price target of $23.00 on the stock.
STI shares, which have been trading in the 52-week range between $15.79 and $33.14, fell 5.0% to trade at $20.53 on Thursday.