UPDATE 1-Bernstein cuts targets on certain US mid-sized banks

jueves 20 de marzo de 2008 14:55 CET

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March 20 (Reuters) - Sanford C. Bernstein cut its price target on most of the U.S. mid-sized banks under its coverage to reflect its higher estimate for loan losses, primarily in the construction and home-equity portfolios.

The brokerage also increased its reserve levels for banks, saying regulators would be seeking a significantly higher coverage.

Bernstein, however, rated Capital One Financial (COF.N: Cotización) and U.S. Bancorp (USB.N: Cotización) as "outperform," adding that Capital One was its top pick.

The brokerage said its current loss estimates and modest reserve build for U.S. Bancorp were conservative enough, while Capital One was expected to generate strong capital and earnings growth.

Bernstein cut its target on the shares of Comerica Inc (CMA.N: Cotización) to $35 from $38, Synovus Financial (SNV.N: Cotización) to $10 from $13, U.S. Bancorp to $35 from $38, but raised its target on Capital One to $61 from $53.

Price target on PNC Financial (PNC.N: Cotización) was raised to $68 from $62. However, the brokerage said it preferred U.S. Bancorp to PNC. (Reporting by Sweta Singh; Editing by Himani Sarkar)