Jefferies Downgrades SunTrust Banks to "Hold" on Revenue Growth Concerns (STI)

Jefferies Downgrades SunTrust Banks to “Hold” on Revenue Growth Concerns (STI)


On Friday, analysts at Jefferies & Co. downgraded financial services firm SunTrust Banks, Inc. (STI) due to revenue growth hurdles.

The analysts downgraded STI from “Buy” to “Hold” with a new price target of $30. This valuation suggests about a 4% upside to Thursday’s closing price of $28.79.

A Jefferies analyst commented, “We are downgrading STI to Hold (target to $30 from $32) on revenue trajectory concerns, notably in mortgage banking. STI has a large % of revs. from mortgage production (>10%) and also had a large positive delta in ’12 from related fee growth. With gain-on-sale margins declining, STI is more exposed than most to revenue revisions. EPS support from declining credit costs and leverage to housing improvement remain positives.”

SunTrust shares were inactive during pre-market trading on Friday. The stock is up about +31% over the past twelve months.

The Bottom Line
Shares of SunTrust (STI) have a dividend yield of 0.69% based on last night’s closing price of $28.79 and the company’s annualized dividend payout of 20 cents per share.

SunTrust Banks, Inc. (STI) is not recommended at this time, holding a DARS™ Rating of 3.2 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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