Shares of regional banks rise on ratings upgrades

Shares of regional banks rise on analyst's ratings upgrades

• On 1:00 pm EDT, Tuesday September 29, 2009

NEW YORK (AP) -- Shares of regional banks edged up Tuesday after an FBR Capital Markets analyst cited strong longer-term prospects in raising his ratings on several of the companies.

In a note to investors, analyst David Rochester upgraded Zions Bancorp and Huntington Bancshares Inc. to "outperform" from "market perform."

Zions' price target was raised to $20, up from $17, while the loss forecast for the year was widened to $10.60 per share from $10.25. Rochester wrote that despite near-term losses, a "material upside is possible" for the company as earnings improve over the long term.

Huntington's price target was raised to $5 from $4. The loss estimate for the year is $1.10 per share. Despite the credit costs in the near term, Rochester wrote that the company's stock returns could be substantial over the next three years as profitability normalizes.

Shares of Zions Bancorp. rose 21 cents to $18.40, while shares of Huntington were up 21 cents, or 5 percent, to $4.41.

Rochester also upgraded ratings on City National Corp., PNC Financial and New York Community Bancorp to "market perform" from "underperform." City National's price target was raised to $37 from $28, while the earnings estimate for the year was kept at 55 cents a share.

For PNC Financial, the price target was raised to $43 from $30. The earnings forecast for 2009 was raised to $2.70 per share from $1.85 per share. New York Community's price target was increased a dollar to $10. The profit estimate for the year remained 90 cents per share.

City National Corp. shares rose 22 cents to $39.04. PNC Financial shares rose $1.51, or 3.2 percent, to $48.06.

New York Community Bancorp Inc. stock rose 24 cents, or 2.2 percent, to $11.35.

U.S. Bancorp was raised to "market perform" from "underperform." The price target was raised to $21 from $14, and the earnings forecast for the year was raised to 86 cents per share, up three cents. The bank's shares slipped 21 cents to $22.02.

Shares of Synovus Financial Corp., the only bank that got a lower rating, were down 19 cents, or 4.9 percent, to $3.71.

Rochester lowered his rating on Synovus to "underperform" from "market perform," citing the steep losses the company faces across its loan portfolio, particularly in its construction and development portfolio.

The price target was lowered to $2.50, from $3.

Buzz up!