UPDATE 1-Bernstein cuts targets on several mid-cap US banks
(Adds analyst comments, background)
BANGALORE Nov 1 (Reuters) - Sanford C. Bernstein was bleak in its outlook for the U.S. mid-cap banks sector and cut its price target on several companies in the segment, as a rise in their non-performing assets and charge-offs accelerated during the third quarter.
Analyst Kevin Pierre said he continues to recommend investors "underweight" the sector, which has been among the worst-performing U.S. equity sectors this year. "We expect several more big bangs in the fourth quarter of 2007," Pierre said.
In a note titled Forgive Our Momentary Lapse of Pessimism, Pierre said, "...third-quarter results convinced us we have not been conservative enough regarding 2008 loss rates."
Pierre moved an average of 6 percent below the 2008 consensus estimates for the "market-perform"-rated banks and said, "Even after our more conservative stance, we believe the risk to our estimates is still skewed to the downside."
The KBW Bank Index was down more than 4 percent, while the broader S&P Financials Sector Index .GSPF was down more than 3 percent on Thursday at 1130 ET. The indexes have sunk more than 15 percent and 11 percent, respectively, since the start of the year.
Some of the price target changes made by the brokerage are given below: Company Name RIC Price Target
Old New BB&T BBT.N $39 $37 Comerica CMA.N $55 $53 Keycorp KEY.N $35 $34 Marshall & Ilsley MI.N $47 $36 M&T Bank MTB.N $118 $113 PNC Financial Services PNC.N $77 $78 Suntrust Banks STI.N $80 $79 (Reporting by Nivedita Gupta)
© Thomson Reuters 2017 All rights reserved.