(Adds brokerage’s comments and details)
Jan 8 (Reuters) - Robert W. Baird & Co began coverage of a dozen U.S. banks, including Bank of America Corp (BAC.N), Wachovia Corp WB.N and Wells Fargo & Co (WFC.N) and said shares of these firms were unlikely to outperform, owing to a difficult consumer and mortgage credit environment.
Baird, which initiated Comerica Inc (CMA.N), M&T Bank Corp (MTB.N) and PNC Financial Services Group Inc (PNC.N) with an “outperform” rating, said shares of these firms will continue to outperform peers, even as growth trends will slow in 2008 due to industry credit trends.
Bank of America, Wachovia, Wells Fargo, SunTrust Banks Inc (STI.N), BB&T Corp (BBT.N), Marshall and Ilsley Corp MI.N, KeyCorp (KEY.N), U.S. Bancorp (USB.N) and Fifth Third Bancorp (FITB.O) were all initiated with a “neutral” rating by Baird.
“Although Bank of America is among the least expensive stocks in our universe, we do not see the valuation discount changing given our expectation of negative earnings-per-share revisions and incrementally weaker credit metrics at the company,” the brokerage said.
Baird set a price target of $42 on Bank of America, $31 on Wells Fargo and $40 on Wachovia.
The new rating and price targets set by Baird on the U.S. banks are given below: COMPANY NAME RIC RATING PRICE TARGET Bank of America Corp (BAC.N) Neutral $42 Wachovia Corp WB.N Neutral $40 Wells Fargo and Co (WFC.N) Neutral $31 BB&T Corp (BBT.N) Neutral $32 SunTrust Banks Inc (STI.N) Neutral $65 Marshall and Ilsley Corp MI.N Neutral $27 U.S. Bancorp (USB.N) Neutral $32 KeyCorp (KEY.N) Neutral $25 Fifth Third Bancorp (FITB.O) Neutral $28 M&T Bank Corp (MTB.N) Outperform $94 Comerica Inc (CMA.N) Outperform $50 PNC Financial Services (PNC.N) Outperform $75 (Reporting by Tenzin Pema in Bangalore; Editing by Pratish Narayanan)