4 Reasons Why You Should Bet on S&T Bancorp (STBA) Stock Now

Improving operating backdrop, rising rate environment, expectations of lesser regulations and strengthening of the domestic economy are expected to continue to support banking stocks. Keeping this in mind, we have selected S&T Bancorp STBA for your consideration.

A positive trend in estimate revisions reflect optimism regarding the company’s earnings growth prospects. The Zacks Consensus Estimate for S&T Bancorp’s current-quarter earnings has moved up 3.3% over the last 60 days. Also, the current-year’s earnings estimates have climbed up 3% in the same time period. As a result, the stock currently carries a Zacks Rank #2 (Buy).

The stock has surged 18.1% over the past six months, widely outperforming the industry’s 3.9% rally.

 

Here’s What Might Drive the Stock Higher

Earnings Strength: While S&T Bancorp’s historical earnings per share (EPS) growth rate of 10% compares favorably with the industry average of 8.5%, investors should really focus on its projected EPS growth (F1/F0). Here, the company is looking to grow at a rate of 15.8%, substantially higher than the industry average of 10.5%.

Revenue Growth: S&T Bancorp has been witnessing consistent improvement in revenues for the past few years. Revenues witnessed a compound annual growth rate of 16.7% over the last three years (2014-2016). Further, the top line is expected to increase 12% in 2017 compared with no growth for the industry.

Favorable ROE: S&T Bancorp’s return on equity (ROE) supports its growth potential. It’s ROE of 9.41% compares favorably with the industry average of 8.79%, implying that it is efficient in using its shareholders’ funds.

Strong Leverage: S&T Bancorp has a debt/equity ratio of 0.07 compared with the industry’s average of 0.52. This reflects the relatively strong financial health of the company, which will help it perform better than its peers under a dynamic business environment.

Other Stocks to Consider

Some other top-ranked stocks from the same space are ConnectOne Bancorp CNOB and CNB Financial CCNE sporting a Zacks #1 Rank (Strong Buy), and First Commonwealth Financial FCF, carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

ConnectOne Bancorp’s Zacks Consensus Estimate was revised 5.9% upward for the current year, in the last 60 days. The company’s share price increased 20.5% in the past six months.

CNB Financial witnessed an upward earnings estimate revision of 4.4% for the current year, in the last 60 days. Its share price increased 26.9% in the past six months.

First Commonwealth Financial witnessed upward earnings estimate revision of 2.5% for the current year, in the last 60 days. Its share price increased 15% in the past six months.

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CNB Financial Corporation (CCNE) : Free Stock Analysis Report
 
S&T Bancorp, Inc. (STBA) : Free Stock Analysis Report
 
First Commonwealth Financial Corporation (FCF) : Free Stock Analysis Report
 
ConnectOne Bancorp, Inc. (CNOB) : Free Stock Analysis Report
 
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