Citi Increases Price Target On SunTrust Banks To $37

In a report published by Citi, SunTrust Banks (NYSE: STI) patience pays off with low issuance to repay TARP.

Citi said that SunTrust announced that the company commenced a $1 bln common stock offering and plans to repurchase all $4.85 bln in TARP. “Our 2011 estimate is unchanged as these results were not materially different to our expectations. We did lower our 2012 estimate to $2.35 to reflect lower rates, lower mortgage origination, and regulatory impacts. We are establishing our 2013 estimate at $3.30. Our target price increase to $37 reflects elimination of dilution risk and a higher long-term ROE in the 12-13% range.”

SunTrust Banks closed yesterday at $29.59.