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Raymond James downgrades BB&T, Carolina Financial


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Raymond James downgrades BB&T, Carolina Financial


Raymond Jamesanalyst Michael Rose and William Wallace IV downgraded their respective stock ratingsfor BB&T Corp. and to "outperform"from "strong buy."

For BB&T,Rose cited the company's intra-quarter guidance and the issuance of $465 millionof preferred stock. And while recently completed dealsand the cessation of larger technology investments are generating cost savings forthe Winston-Salem, N.C.-based company, the prospect of BB&T hitting its 56%-57%efficiency ratio target in the fourth quarter is now a more challenging prospectin light of management's recently reduced loan and fee income growth outlook, theanalyst added. Rose also lowered his 2016 EPS estimate to $2.85 from $2.90, andhis 2017 EPS estimate to $3.20 from $3.30. He kept the price target for the company'sstock at $38.

For CarolinaFinancial, Wallace stated that he still expects the Charleston, S.C.-based companyto outperform peers due to its strong balance sheet, robust loan growth and potentialM&A. However, the analyst said that he feels that the current valuation levelsof the company's stock more closely reflect the value of the franchise. Wallacemaintained his $20 price target for Carolina Financial, as well as his 2016 and2017 EPS estimates of $1.30 and $1.45.


Piper Jaffrayanalyst Peyton Green initiated coverage of Conway, Ark.-based Home BancShares Inc., with a "neutral" rating anda $44.50 price target. The analyst also set his EPS estimates at $2.40 for 2016,and $2.60 for 2017.

The analystcommended the company's combination of strong EPS growth record and very high profitability,which has been achieved through solid organic growth, attractively priced M&A,disciplined loan pricing and tight cost control. He also pointed out that opportunisticM&Aactivity by the company has enhanced organic growth in particular, giving thecompany an efficiency ratio of less than 40%.

Green also notedthat Home BancShares has exceeded earnings expectations 88% of the time over thelast two years, and wrote that he expects elevated reported net interest marginand stable core net interest margin to persist through 2016.