The Fed announced it is holding dividends to 30% of earnings. That means BBT is forecasting at least $2.13 per share EPS for 2011, up from $1.16 in 2010, and more importantly, up from Wall Street analysts of $1.73 per share.
That will result in upgrades, upward revisions of price targets, and forward momentum.
It will not happen overnight, but the near future looks bright. My current forecast is for $2.04 per share, so it looks like I am being too conservative.
I believe the Fed's recommendation for dividends was 20 to 30 percent of expected earnings. It appears that several of the banks conservatively used the 20% guideline and that appears to be Kelly Kings approach - which targets earnings to at least $3.20 to $3.24 for 2011. Norm's estimated earnings are $3.24 - and I think he is right on the money. Norm's estimate for first quarter is $.65. That will be the first test of his accuracy.