4 Big Bank Plays from JPMorgan
Juneja on Friday raised his price target for U.S. Bancorp's shares by a dollar to $38.50, while raising his 2012 EPS estimate by a nickel to $2.86 and his 2013 EPS estimate by two cents to $3.12, and said that "our new price target assumes a price to tangible book value multiple of 3.2x versus the expected peer group multiple of 1.5x."
The analyst said that "USB has greater capital return than peers given high profitability and strong capital ratios," and that JPMorgan expects a continued "favorable business mix" for the company, along with "faster growth in revenues than peers from multiple sources, above-average earnings and tangible book value growth, and lower impact from regulatory/political issues."
Interested in more on U.S. Bancorp? See TheStreet Ratings' report card for this stock.
3. Wells Fargo
Shares of Wells Fargo (WFC) closed at $34.03 Friday, returning 36% year-to-date, following a 10% decline during 2011.
The shares trade for 1.8 times tangible book value, and for 9.3 times the consensus 2012 EPS estimate of $3.67. The consensus 2012 EPS estimate is $3.32.
Based on a quarterly payout of 22 cents, the shares have a dividend yield of 2.59%.
Wells Fargo has also been a solid, consistent earner when compared to other large-cap banks, with ROA ranging between 1.26% and 1.40%, over the past five quarters.
Juneja's price target for the shares is $42, "reflecting 2.0x price to YE 2012 tangible book value versus the expected peer group multiple of 1.5x tangible book value." The analyst estimates that Wells Fargo will earn $3.31 a share for all of 2012, followed by 2013 EPS of $3.70.
Wells Fargo's "Overweight" rating for Wells Fargo is supported by "better fee income growth opportunities with recent acquisitions of loan portfolios, expansion of capital markets and wealth management businesses as well as leading mortgage banking position," as well as expense reduction initiatives, and "lower international risk and capital markets exposure relative to peers," according to Juneja.