Dave Gore's Trades That Make Sense Message Board

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Strategies & Market Trends : Dave Gore's Trades That Make Sense

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To: Dave Gore who wrote (385)	1/4/2002 12:53:17 PM
From: Dave Gore	Read Replies (1) of 16631

FINANCIAL SECTOR Stock upgrades by JPM: Again, FWIW Commerce Bancsh (CBSH) 38.50 +0.04: -- Before Open -- JP Morgan upgrades to BUY from Market Perform rating with price target of $45. Firm notes that earnings have been under some modest pressure in 2001 due to lower interest rate impact on net interest margin, but should accelerate to more normal 8-10% pace in 2002 and 2003; core banking franchise in Missouri, Kansas and Illinois should support an earnings growth rate in 8-10% range over next several years; revenue contribution from fee income sources such as trust, transaction processing and commercial cash management have been increasing in recent years. Comerica (CMA) 57.64 +0.64: -- Before Open -- JP Morgan upgrades to BUY from long-term Buy and ups price target to $75 from $65. Firm thinks stronger economy in the Midwest in 2002 should eventually lead to stabilization in credit quality. Commercial focus is a strength of the company, and firm believes that CMA is gaining market share in the current environment. Notes that disciplined financial management has led to stable net interest margin in both falling and rising interest rate environments. Mercantile Bank (MRBK) 43.13 +0.23: -- Before Open -- JP Morgan upgrades to BUY from Market Perform rating. Firm says MRBK ranks as one of the best combinations of high growth and low volatility which translates into a market premium and is the basis for firm's $49 price target; cites company's outstanding credit quality with no significant deterioration in the latest down turn; opportunity to further leverage company's expertise in the asset management business which could be an additional source of growth for the future. SouthTrust (SOTR) 24.05 -0.09: -- Before Open -- JP Morgan upgrades to BUY from long-term Buy and ups price target to $29 from $25. Firm says attractive franchise in growth markets in Southeast should help to maintain net interest income growth into 2003; more net interest margin stability in the future as company has reduced interest rate risk; credit quality will rank among the best in the industry throughout the coming year.

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