Reuters article continues "... and said it may cut its ratings on ten regional banks, citing lessened government support for the institutions under new U.S. regulations."
BBT is solid, bailout not even a thought. Could be some psychological fallout for a few because Uncle Sugar has put his checkbook back in the drawer, but for BBT that is an opportunity in the long run, no risk of failure.
BB&T is a good bank, but still has too many toxic assets on its balance sheet, thus the drop in price since earnings were release. While other banks have been getting rid of bad loans, BBT has been hanging on to these troubled assets in hopes of getting a better price. Strategy backfired. Now it's going to take several quarters to play catch-up to the rest of the banking industry. BB&T's price is likely to tread water for the next 12 months. Thanks a lot you guys. I think someone needs a lesson in Banking Principles 101.
The bottom line is the PE ratio and price per share were out of line with historical data. With an estimated earnings of 1.50 in 2011 the price of the stock should be about 22.50. The dividend is about 40% of projected 2011 earnings and that's exactly where it should be.Being a traditional bank, BBT's earnings are slow growing as revenue streams are limited, but so is risk. It is a very safe bank and will do well in the long run. As the price declines it looks tastier for a takeout. PNC would do well to give this bank a second look, as both banks are run pretty much the same and integration wouldn't be too difficult.
$22.50 is my guess also. I did however start to buy at %27, bought more at $26 and plan to buy at each dollar drop through $20 (if we get that low). Hope we bottom out by year end. If not we should get a new chairman.
We all know how wise Moody's is with their ratings. Just look at all the toxic stuff the gave high ratings on. BB&T is a super strong bank & perhaps even Moody's will figure it out someday. Moody's has zero credibility!!!