Regions Financial: Not Too Late to Jump on This Bandwagon

[Stocks-to-Watch]

Regions Financial (RF) is up 37% in the past three months. But there’s still time to catch quite a bit of upside in the stock, argues Credit Suisse analyst Craig Siegenthaler in upgrading the shares to Outperform.

“While Regions Financials’ share price has already appreciated 30% year to date and is up 20% versus peers, we see another leg up driven by three catalysts, which are not fully embedded in the stock price,” Siegenthaler wrote.

1. Lower than expected TARP capital raise (details in March)
2. NIM outperformance vs. peers (2012-2013 results)
3. Loan growth inflection (mid-2012). Additionally, even after recent outperformance, we believe RF still has 30% 12-month upside and is significantly undervalued.

Siegenthaler wrote that the Street expected the bank to raise $1.1 billion to $1.3 billion in equity to pay back TARP, but the bank looks likely to raise 800 million instead.



Original Article Source by Barrons.com