Trade of the Day: BBT Stock Less Than $1 Away From a Breakout

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BB&T Corporation (NYSE:BBT) — This is the 11th largest bank in the United States by assets, and it operates 1,750 branches, located mainly in the Southeast.

S&P Capital IQ rates BBT stock a “buy” based in part on its strong loan growth, which came in at 4.2% in 2014, and steady earnings increases in a low-interest rate environment. The bank earned $2.75 per share in 2014, up from $2.19 in 2013. Capital IQ estimates earnings of $2.96 in 2015 and $3.13 in 2016.

In November, BB&T announced the purchase of Susquehanna Bancshares for $2.5 billion. The deal will close next quarter and add about $18.5 billion in assets. This is the latest in a series of what Capital IQ analysts describe as “BB&T’s history of careful acquisitions.”

Their 12-month target of $42 for BBT stock is based on a modest P/E estimate of 14.1 times a four-quarter earnings estimate of $2.97. Credit Suisse Group AG (ADR) (NYSE:CS) has an “outperform” rating on shares with a target of $44.

BBT stock formed an impressive 12-month bullish saucer with a resistance line at $40. If overcome, it should propel shares to $45, supported by a spurt of high volume. The question is, when will it break $40?

By taking the midpoint of the October sell-off, we can estimate that BBT stock is on the verge of a breakout between now and the end of May, which would result in a gain of 13%.

BBT stock is also recommended as a cornerstone investment for long-term buyers. They could reap much higher capital gains, plus an annual dividend of $1.08 per share, for a current yield of 2.8%.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/05/bbt-corporation-bbt-stock-trade-of-the-day/.

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