Jefferies analyst Ken Usdin upgraded BB&T (BBT), SunTrust Banks (STI) and Regions Financial (RF) to Buy from Hold from Hold while downgrading M&T Bank (MTB) and Zions Bancorp (ZION) to Hold from Buy. Looking to 2020 and 2021, banks face slowing earnings growth and "ongoing sentiment hurdles," Usdin tells investors in a research note. The analyst's base case assumes a stable economy, but he notes that "trade talk could tip it either way." Further, the 2020 election could weigh not only on valuation multiples, but also on earnings estimates based on the regulatory outlook, adds the analyst. He believes attractive dividend yields and a shift toward value stocks could help, but admits that earnings revisions are biased down with more rate cuts likely. Regions "has led the pack" in protecting its net interest margin for a tougher rates environment, while BB&T has less downside to estimates relative to peers and a faster earnings growth rate given benefits from the pending merger-of-equals with SunTrust, contends Usdin.

UBS lowered the firm's price target on Zions Bancorp to $45 from $47 and keeps a Neutral rating on the shares. While "impressed" by Zions' ability to control deposit costs in a competitive backdrop, the firm thinks the liability sensitive positioning potentially puts the bank in "a precarious spot" in a higher-for-longer rate scenario and coming out of Q1 earnings the firm says it gets the sense that the net interest income trajectory from here is "well understood by the Street."

Get caught up quickly on the top news and calls moving stocks with these five Top Five lists. 1... To see the rest of the story go to thefly.com. See Story Here

Get caught up quickly on the top news and calls moving stocks with these five Top Five lists. 1... To see the rest of the story go to thefly.com. See Story Here

Truist lowered the firm's price target on Regions Financial to $20 from $22 and keeps a Hold rating on the shares as part of a broader research note recapping Q1 earnings among Community and Regional Banks. The firm's updated model for Fed funds rate forecast calls for zero cuts in 2024 and four 25bps cuts in 2025 from three in 2023 and 2024 previously, the analyst tells investors in a research note. Truist is also revising its FY24 and FY25 EPS on the bank to $1.93 and $2.12 from $1.97 and $2.15, with estimate revisions primarily driven by higher loan loss provisioning. Regions' net charge-offs were also "at the high-end" of management's guidance of 40bps to 50bps in Q1, the firm adds.