Regions Financial Corp. (RF) — This financial holding company has almost 1,700 banking offices in 16 states mostly in the Sun Belt region. On Feb. 13, S&P raised its opinion to “strong buy” from “buy,” with a 12-month price target of $12. On March 7, it raised its target to $13, based on anticipated above-peer loan growth of 3% to 5%, a higher return of “excess” capital in the form of a dividend increase, and noninterest expense reductions.
Consensus estimates are for earnings of $0.86 per share in 2014, up from $0.82 in 2013, and $0.92 in 2015. The company pays an annual dividend of $0.12 for a current yield of 1.1%.
I first recommended RF on Feb. 26, near $10.50, saying, “Technically, RF has been in a powerful bull market since March 2012. In December 2013, it broke from a bullish triangle at $10 and ran to a six-year high of $11.08 in January.
“A round of profit-taking dropped the stock to its bullish support line, where it reversed and rallied above its 50-day moving average at $10.16. This pop was supported by buy signals from my proprietary indicator, the Collins-Bollinger Reversal (CBR), and MACD, as well as high volume. Buy RF as an intermediate-term trade to $12.”
On Thursday, the stock broke to a new high from an ascending triangle, which was coupled with a fresh buy signal from MACD. As a result, I’m increasing my trading target to $13.