BB&T Capital stock rating upgraded to Outperform by KBW on valuation

Investing.com - Keefe, Bruyette & Woods (KBW) upgraded BB&T Capital (NYSE:BBT) from Market Perform to Outperform with a price target of $33.00 on Friday.

The upgrade is based on expectations for improved returns coupled with a discounted valuation, as the stock trades at a 33% discount to peers on 2026 estimates and a 23% discount after accounting adjustments. This aligns with the current price-to-book ratio of 0.67, suggesting a significant discount to tangible book value.

Following the merger of equals (MOE) between Brookline and Berkshire that closed on September 1, KBW expects the combined entity Beacon to report a peer-leading return on tangible common equity (ROTCE) of approximately 17% in 2026 despite trading at just 1.1 times proforma tangible book value. The company has demonstrated profitability with earnings per share of $2.10 over the last twelve months. For deeper insights into BBT’s financials and growth prospects, check out the comprehensive research available on InvestingPro.

Key catalysts identified include achieving cost savings of approximately 12% of the combined company’s expenses and the planned reduction of commercial real estate (CRE) concentration.

The CRE concentration is expected to be 352% of regulatory capital in the third quarter of 2025 before reducing to below 300% by the fourth quarter of 2027.

In other recent news, Berkshire Hills Bancorp reported its second-quarter results for 2025, exceeding analyst expectations with an earnings per share (EPS) of $0.66 compared to the forecasted $0.59. This marks an 11.86% positive surprise for investors. Revenue also surpassed projections, coming in at $113.67 million against the anticipated $113.34 million. Additionally, Beacon Financial announced the completion of a merger of equals between Berkshire and Brookline, effective September 1, 2025, creating a $24 billion bank in the Northeast. In another development, Keefe, Bruyette & Woods raised its price target for BB&T Capital to $33.00 from $30.95, maintaining an Outperform rating. These updates provide investors with a glimpse into the recent activities and performance of these financial entities.

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