M&T Bank (NYSE:MTB) Valuation High Says FBR

M&T Bank (NYSE:MTB) continues to be a solid bank, and have probably been slightly penalized by investors who have been used to having stronger returns, even after a decent quarter by the bank.

FBR says, "We consider it a strong quarter (Q4), particularly as the benefits of loan growth, lower expenses, and favorable credit trends will carry forward into future periods. We were somewhat surprised that the shares' reaction was not more favorable, and can only conclude that investors have become accustomed to even larger earnings upside from MTB. We raise our respective 2011 and 2012 operating EPS estimates to $6.25 (from $6.10) and $7.30 (from $7.05). M&T is a high-quality bank with strong capital generation and growing pre-provision earnings, but current valuation keeps us on the sidelines."

FBR Capital maintains a "Market Perform" rating on M&T Bank (MTB), which closed Tuesday at $86.20, losing $0.18, or 0.21 percent. FBR raised their price target on M&T from $88 to $90.