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PNC, USB, STT, STI, KEY, JPM, Banks - Major Regional Stocks 12.29% undervalued

^{Published on 2011-01-26 12:11:00 - WOPRAI}
 

January 26, 2011 / M2 PRESSWIRE / BUYINS.NET / http://www.squeezetrigger.com is monitoring the Banks - Major Regional sector and these stocks are the most undervalued as of today. PNC FINANCIAL SERVICES GROUP (NYSE:PNC), US BANCORP (NYSE:USB), STATE STREET CORP (NYSE:STT), SUNTRUST BANKS INC (NYSE:STI), KEYCORP (NYSE:KEY), JPMORGAN CHASE & CO (NYSE:JPM) are all expected to go Up as they are undervalued according to industry standard valuation metrics. The valuation model employs a three-factor approach to stock valuation using fundamental variables--the company's trailing 12-month Earnings-Per-Share (EPS), the analyst consensus estimate of the company's forecasted 12-month EPS, and the 30-year Treasury yield--to create a highly accurate reflection of a company's fair value.

The chart below displays the projected Fair Value and Valuation discount/premium of the most undervalued stocks in the highlighted industry group:

     Symbol     Company Name                        Last Close     Fair Value     Valuation                   Industry               
     PNC        PNC FINANCIAL SERVICES GROUP        60.88          69.41          12.29% undervalued          Banks - Major Regional 
     USB        US BANCORP                          26.76          28.14          4.89% undervalued           Banks - Major Regional 
     STT        STATE STREET CORP                   47.69          59.66          20.06% undervalued          Banks - Major Regional 
     STI        SUNTRUST BANKS INC                  29.18          33.78          13.62% undervalued          Banks - Major Regional 
     KEY        KEYCORP                             8.91           16.33          45.44% undervalued          Banks - Major Regional 
     JPM        JPMORGAN CHASE & CO                 44.87          45.41          1.19% undervalued           Banks - Major Regional 

Here are some of the variables that are utilized when calculating the Fair Market Valuation of a stock: Long-run EPS growth rate, Duration of Business-growth-cycle, Volatility of EPS growth rate, Systematic or beta risk of the firm, Correlation between the firm's EPS and the interest rate environment, EPS growth volatility, Dividend payout ratio, Buffer earnings, Interest rate related criteria: Interest rate (30 year yield) long-run level, Duration of interest rate cycle, Interest rate volatility. The Fair Market Valuation uses 12-month historic and forecasted EPS values and the current 30-year treasury yield as primary determinants. When calculating risk/return values such as the Sharpe ratio, the historic periods used are five years.

Some expected results of the Valuation Model are: the valuation of a stock increases in a declining interest rate environment. Increasing current and/or projected EPS will produce a higher Valuation. While long-term EPS growth would produce a corresponding long-term Valuation increase, concomitant long-term interest rate increases would offset EPS growth and depress the Valuation. The shorter a company's own business cycle, the higher its stock Valuation will be.

PNC FINANCIAL SERVICES GROUP (NYSE:PNC) - The PNC Financial Services Group, Inc. operates as a diversified financial services company. It offers retail banking, corporate and institutional banking, asset management, and residential mortgage banking services. Its retail banking products and services comprise deposit, lending, brokerage, trust, investment management, and cash management services. The company also offers corporate and institutional banking products and services, including lending products, such as secured and unsecured loans, letters of credit and equipment leases; treasury management services comprising cash and investment management, receivables management, disbursement, funds transfer, information reporting, and global trade services; and capital markets-related services, such as foreign exchange, derivatives, loan syndications, mergers and acquisitions advisory and related services for mid-sized corporations, government, not-for-profit entities, and large corporations, as well as offers commercial loan servicing, real estate advisory, and technology solutions for the commercial real estate finance industry. In addition, it manages assets on behalf of institutional and individual investors through equity, fixed income, alternative and cash management separate accounts, and funds, as well as offers market risk management, financial markets advisory, and enterprise investment system services worldwide. Further, the company offers distressed assets, such as commercial residential development loans, cross-border leases, consumer brokered home equity loans, retail and non-prime mortgages, and residential construction loans. It primarily operates in Pennsylvania, Ohio, New Jersey, Michigan, Maryland, Illinois, Indiana, Kentucky, Florida, Missouri, Virginia, Delaware, Washington, D.C., and Wisconsin. As of December 31, 2009, the company operated 2,512 retail banking branches and 6,473 ATMs. The PNC Financial Services Group was founded in 1922 and is headquartered in Pittsburgh, Pennsylvania.

US BANCORP (NYSE:USB) - U.S. Bancorp, a financial bank holding company, provides various banking and financial services in the United States. It generates various deposit products, including checking accounts, savings accounts, money market savings, and time certificates of deposit accounts. The company originates a portfolio of loans comprising commercial loans and lease financing; commercial real estate; residential mortgage; and retail loans, including credit card, retail leasing, home equity and second mortgages, and other retail loans. It also offers wholesale lending, equipment finance, small-ticket leasing, depository, treasury management, capital markets, foreign exchange, and international trade services to middle market, large corporate, commercial real estate, and public sector clients. In addition, U.S. Bancorp provides telebanking, online banking, direct mail, and automated teller machine (ATM) services. The company, through other subsidiaries, provides trust, private banking, financial advisory, investment management, retail brokerage services, insurance, and custody and mutual fund services; and payment services, including consumer and business credit cards, stored-value cards, debit cards, corporate and purchasing card services, consumer lines of credit, ATM processing, and merchant processing. U.S. Bancorp primarily serves individuals, estates, foundations, business corporations, and charitable organizations. As of December 31, 2009, it operated 3,015 banking offices and 5,148 ATMs. The company was founded in 1863 and is headquartered in Minneapolis, Minnesota.

STATE STREET CORP (NYSE:STT) - State Street Corporation, through its subsidiaries, provides various products and services for the institutional investors worldwide. Its investment servicing business provides services, such as custody, product- and participant-level accounting, daily pricing, and administration; master trust and master custody; recordkeeping; shareholder services, including mutual fund and collective investment fund shareholder accounting; foreign exchange, brokerage, and other trading services; securities finance; deposit and short-term investment facilities; loans and lease financing; investment manager and alternative investment manager operations outsourcing; performance, risk, and compliance analytics; and shareholder comprising mutual fund and collective investment fund shareholder accounting. State Street Corporations investment management business offers a range of services for managing financial assets, such as investment research services and investment management, including the passive and active U.S. and the non-U.S. equity and fixed-income strategies; and other related services, such as securities finance. The company serves mutual funds, collective investment funds and other investment pools, corporate and public retirement plans, insurance companies, foundations, endowments, and investment managers. The company was founded in 1832 and is headquartered in Boston, Massachusetts.

SUNTRUST BANKS INC (NYSE:STI) - SunTrust Banks, Inc. operates as the holding company for SunTrust Bank, which provides various financial services to consumer and corporate customers in the United States. The company operates in four segments: Retail and Commercial, Wealth and Investment Management, Corporate and Investment Banking, and Household Lending. The Retail and Commercial segment offers various financial products and services that include consumer deposits; home equity lines; consumer lines; commercial and commercial real estate lending; financial risk management; insurance premium financing; treasury and payment solutions, including commercial card services; and specialized commercial real estate investments. The Wealth and Investment Management segment provides brokerage, professional investment management services, trust services, and family office solutions. This segment also offers administration and custody services; bundled administrative and investment solutions, including planned giving, charitable trustee, and foundation grant administration services for non-profit organizations; escrow services; portfolio construction and manager due diligence services; and investment advisory services. The Corporate and Investment Banking segment provides investment banking products and services to its clients, such as strategic advice, capital raising, and financial risk management. This segment also offers traditional lending, leasing, treasury management services, and institutional investment management to its clients. The Household Lending segment offers residential mortgages, home equity lines and loans, indirect auto, student, bank card, and other consumer loan products. The company also provides mortgage banking, credit-related insurance, asset management, securities brokerage, and capital markets services. As of December 31, 2009, it operated 1,683 full-service banking offices. The company was founded in 1891 and is headquartered in Atlanta, Georgia.

KEYCORP (NYSE:KEY) - KeyCorp operates as a holding company for KeyBank National Association that provides various banking services in the United States. The company operates in Community Banking and National Banking divisions. The Community Banking division provides regional banking services, including deposit and investment products; personal finance services and loans comprising residential mortgages, home equity, and installment loans; deposits, investment and credit products, and business advisory services to small businesses; and financial, estate and retirement planning, and asset management services to high-net-worth clients. This division also provides commercial banking products and services, such as commercial lending, cash management, equipment leasing, investment and employee benefit programs, succession planning, access to capital markets, and derivatives and foreign exchange to mid size businesses. The National Banking division offers real estate capital and corporate banking services. Its real estate capital banking services include construction and interim lending, permanent debt placements and servicing, equity and investment banking, and other commercial banking products and services to developers, brokers, and owner-investors. This divisions corporate banking services comprise cash management, interest rate derivatives, and foreign exchange products and services. It also offers commercial lending, treasury management, derivatives, foreign exchange, equity and debt underwriting and trading, and syndicated finance products and services, as well as provides equipment financing services. KeyCorp also offers personal and corporate trust services, principal investing, community development financing, securities brokerage, and merchant services. As of December 31, 2009, it operated 1,007 retail banking branches in 14 states; and 1,495 automated teller machines in 16 states. The company was founded in 1849 and is headquartered in Cleveland, Ohio.

JPMORGAN CHASE & CO (NYSE:JPM) - JPMorgan Chase & Co., a financial holding company, provides various financial services worldwide. The companys Investment Bank segment provides investment banking products and services, including advising on corporate strategy and structure, capital raising in equity and debt markets, risk management, market-making in cash securities and derivative instruments, and prime brokerage and research. This segment serves corporations, financial institutions, governments, and institutional investors. Its Commercial Banking segment provides lending, treasury services, investment banking, and asset management services to corporations, municipalities, financial institutions, and not-for-profit entities. The companys Treasury and Securities Services segment offers transaction, investment, and information services. It also offers cash management, trade, wholesale card, and liquidity products and services to small and mid-sized companies, multinational corporations, financial institutions, and government entities. Its Asset Management segment provides investment and wealth management services to institutions, retail investors, and high-net-worth individuals. It also offers global investment management in equities, fixed income, real estate, hedge funds, private equity, and liquidity products, including money market instruments and bank deposits; and trust and estate, banking, and brokerage services, as well as retirement services. The companys Retail Financial Services segment offers retail banking and consumer lending services that include checking and savings accounts, mortgages, home equity and business loans, and investments through ATMs, online banking, and telephone banking, as well as auto dealerships and school financial-aid offices. Its Card Services segment issues credit cards and processes various credit card payments. JPMorgan Chase & Co. was founded in 1823 and is headquartered in New York, New York.

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