BB&T's Results And Guidance Better Than They Seem, But Return Prospects Are Modest

BB&T (BBT) shares have outperformed since my last update and over the last year, due, at least in part I believe, to the counter-cyclical earnings leverage potential of the upcoming merger with SunTrust (STI). Although investors weren’t thrilled about the earnings and guidance offered by the company this time around, I believe the underlying business trends are a little better than they otherwise seem, and I believe the company is on a decent footing for this late stage of the bank cycle.

As far as the investment angle goes, I won’t pound the table for BB&T at today’s price, but it’s a decent prospect relative to peers and rivals like JPMorgan (JPM), PNC (PNC), U.S. Bancorp (USB), and Wells Fargo (WFC). All of these names offer their own perks and challenges (JPMorgan and PNC as quality growth, U.S. Bancorp as a safe haven, Wells Fargo as a restructuring story), and I think BB&T has decent return prospects (high single-digit to low double-digit returns) as well as the potential for better-than-expected post-merger synergies and growth.

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BB&T's Results And Guidance Better Than They Seem, But Return Prospects Are Modest