Magazine article American Banker

Price Drop Said to Make FleetBoston a Bargain

Magazine article American Banker

Price Drop Said to Make FleetBoston a Bargain

Article excerpt

With shares of FleetBoston Financial Corp. down 12.2% since May 29, many analysts are calling the stock one of the best deals among financials.

"It is one of the cheapest stocks in the bank group I cover," said Steven Wharton, a buy-side analyst with Loomis, Sayles & Co. in Boston. At an American Banker roundtable discussion on Tuesday Mr. Wharton said many investors are scared about the developments in Argentina, where FleetBoston has exposure in retail banking and government debt -- but that these concerns are overblown.

"They could be on the hook for some sovereign debt, but overall their international line of business is growing," he said, adding that any possible losses from South America could easily be absorbed.

Fleet issued its 10Q filing with the Securities and Exchange Commission Tuesday, stating that its financial results "have not been significantly impacted by this situation (in Argentina) to date." The company even said that dips in its domestic loan portfolio were partly offset by loan growth in Latin America.

Denis Laplante of Fox-Pitt, Kelton Inc. said that the bad news surrounding Fleet is already out. Investors who are becoming wary about the continuity in consumer spending might want to shift to Fleet stock, he said. "If you think that consumer lending is getting a little worse and chances for commercial loan growth are getting better, Fleet is the perfect situation," he said.

Fleet's earnings have been dragged down for some time by integration costs from its 1999 merger with BankBoston. …

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