UnionBanCal "sector perform," target price reduced

07/24/06 - RBC Capital Markets

NEW YORK, July 24 (newratings.com) - Analysts at RBC Capital Markets maintain their "sector perform" rating on UnionBanCal Corp (UB), while reducing their estimates for the company. The target price has been reduced from $74 to $68.

In a research note published this morning, the analysts mention that the company has reported its 2Q for continuing operations short of the estimates and the consensus due to low fee income and margin compression. UnionBanCal's loan and deposit growth rose by 15% and 14%, respectively, during the quarter, the analysts say. UnionBanCal's credit quality remained healthy and the company managed its expenses efficiently, RBC Capital Markets adds. UnionBanCal has reduced its EPS guidance for 2006 from $5.30-$5.50 to $4.90-$5.05. The EPS estimates for 2006 and 2007 have been reduced from $5.30 to $4.93 and from $5.75 to $5.25, respectively.