Merrill cautious on regional bank takeovers

[WTB RSS]

SAN FRANCISCO (MarketWatch) -- Bank of America Merrill Lynch analysts said Thursday that some regional bank shares have gained too much on takeover speculation. "The banking industry is in the early stages of a material consolidation cycle, and takeout potential should be a factor for consideration in stock selection," L. Erika Penala and colleagues at Bank of America Merrill Lynch, wrote in a note to investors. "However, we believe our quantitative analysis suggests that actual upside in a deal (11% at median) is more modest than current investor sentiment believes." The banks whose stocks already appear to be fully reflecting potential takeovervalue are Synovus Financial , Associated Banc-Corp and Bank of Hawaii , the analysts said. They downgraded Synovus to underperform from buy. The analysts also cut Huntington Bancshares to neutral from buy. This bank is likely to be an acquirer rather than a takeover target. But the increase in valuations of potential targets means Huntington may make less profit from deals, the Merrill analysts said. Synovus shares fell 4.8% to $2.76 in morning action Thursday, while Huntington declined 2.6% to $7.34.

Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.

http://feedads.g.doubleclick.net/~at/w1FUiA2Bs3NJIKHBv2DG-EkeMFA/0/di (http://feedads.g.doubleclick.net/~at/w1FUiA2Bs3NJIKHBv2DG-EkeMFA/0/da)
http://feedads.g.doubleclick.net/~at/w1FUiA2Bs3NJIKHBv2DG-EkeMFA/1/di (http://feedads.g.doubleclick.net/~at/w1FUiA2Bs3NJIKHBv2DG-EkeMFA/1/da)

http://feeds.feedburner.com/~ff/marketwatch/marketpulse?d=yIl2AUoC8zA (http://feeds.marketwatch.com/~ff/marketwatch/marketpulse?a=xxg-ll6Ress:LIN7Hp2YLCI:yIl2AUoC8zA) http://feeds.feedburner.com/~ff/marketwatch/marketpulse?i=xxg-ll6Ress:LIN7Hp2YLCI:F7zBnMyn0Lo (http://feeds.marketwatch.com/~ff/marketwatch/marketpulse?a=xxg-ll6Ress:LIN7Hp2YLCI:F7zBnMyn0Lo) http://feeds.feedburner.com/~ff/marketwatch/marketpulse?i=xxg-ll6Ress:LIN7Hp2YLCI:V_sGLiPBpWU (http://feeds.marketwatch.com/~ff/marketwatch/marketpulse?a=xxg-ll6Ress:LIN7Hp2YLCI:V_sGLiPBpWU) http://feeds.feedburner.com/~ff/marketwatch/marketpulse?d=qj6IDK7rITs (http://feeds.marketwatch.com/~ff/marketwatch/marketpulse?a=xxg-ll6Ress:LIN7Hp2YLCI:qj6IDK7rITs)
http://feeds.feedburner.com/~r/marketwatch/marketpulse/~4/xxg-ll6Ress

More... (http://feeds.marketwatch.com/~r/marketwatch/marketpulse/~3/xxg-ll6Ress/story.aspx)