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Baird downgrades SunTrust


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Baird downgrades SunTrust


Baird Equity Research analyst David George downgraded Atlanta-basedSunTrust Banks Inc. to"underperform" from "neutral" and also lowered the price targetto $41 from $43.

The analyst highlighted that the company "deserves creditfor improving operating leverage in this challenging operating environment"— it is one of the best performing banks. SunTrust is currently trading close toapproximately 12.5x the 2017 EPS estimate, which is more than high-quality bankslike PNC Financial Services Group Inc.,U.S. Bancorp and

And the analyst believes that SunTrust's risk/reward profileis not compelling. George thinks that the company's 2017 EPS estimate is at riskbecause of net interest margin compression and repricing in the company's commercialswap portfolio. The analyst is currently estimating the company's NIM at 2.90%,compared to consensus estimate of 3.00%.

His 2016 and 2017 EPS estimates are $3.44 and $3.55, respectively.

Dropped coverage

Boenning & Scattergood terminated coverage of Buffalo, N.Y.-basedFirst Niagara Financial Group Inc.,after the Federal Reserve approvedthe company's pendingmerger with .

The analyst last rated the company at "underperform."

The firm said it is "reallocating resources to focus oncompanies that will be going concerns for the foreseeable future."

Matthew Schultheis covered First Niagara before this coveragediscontinuation.