The banking sector overall - at 12-15x 2014 EPS and 1.5-.19x book value - is "fairly valued," says Oppenheimer's Terry McEvoy, but he finds some undervalued names headed into Q3 earnings.
BB&T, says McEvoy has averaged a 12.5x forward P-E multiple vs. the 10.6x it's at now.
KeyCorp trades at just 11.3x earnings vs. its peer group at 13.
FirstMerit has had a big run and trades at 13.9x estimates, but it's a growth play - 12% organic loan growth this year along with reasonably-priced acquisitions - and deserves this multiple, says McEvoy.
At 18x consensus, Signature Bank is also a growth play deserving of a big multiple - net loans and leases were up 13% Y/Y in Q2.