UnionBanCal "market perform," target price raised

05/15/06 - Punk Ziegel & Co.

NEW YORK, May 15 (newratings.com) - Analyst Richard X Bove of Punk Ziegel & Co reiterates his "market perform" rating on UnionBanCal (UB). The target price has been raised from $70 to $76.

In a research note published this morning, the analyst mentions that the company's earnings were boosted by an increase in interest rates, contrary to expectations. UnionBanCal's reserves are low and the company is facing increasing competition from Wachovia and Bank of America, the analyst says. The company's margins are likely to be adversely affected in the current year if the Fed reduces the interest rates, Punk Ziegel & Co adds. The EPS estimates for 2006 and 2007 have been raised from $5.15 to $5.25 and from $5.61 to $5.66, respectively.