BB&T Capital (NYSE:BBT) EPS Estimate Lowered on Higher Tax Rate

Citing higher tax rates and provision expense, FBR lowered their 2011 EPS estimate on BB&T Capital (NYSE:BBT).

FBR says, "Our new price target assumes BBT trades at 10x our normalized EPS of $3.00 and 2x TBV. In addition, we are lowering our FY11 EPS estimate to $1.75 from $2.10 due to a higher tax rate ($0.12/share) and higher provision expense, reflecting a slower pace of reserve release. We reduced our FY12 EPS estimate from $2.85 to $2.70, due to a higher effective tax rate. Core EPS were weaker than expected; however, many of the underlying balance sheet trends continue to move in the right direction: credit costs declined, deposit composition and costs improved, and select loan categories (C&I) continue to grow. With regard to capital, BB&T highlighted its priorities for capital deployment: (1) increase the dividend, (2) identify attractive acquisitions, and (3) repurchase shares."

FBR Capital maintains a "Market Perform" rating on BB&T Capital (BBT), which was trading at $28.00, down $0.40, or 1.37 percent, as of 1:15 PM EST. FBR raised their price target on BB&T from $28 to $30.