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Nathan Tepley, Brandon Sauter, Yuwei Tang, Danielle Seamon
˜Overview
˜American Express
˜Keycorp
˜Wells Fargo
˜CitiGroup
˜Conclusion
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Company
AmericanExpress
WellsFargo
CitiGroup
Keycorp
CurrentPrice
(asof10/30/15)
TargetPrice
Upside
InitialPurchasePrice
SIMWeight
Change
73.26
81.58
11.36%
75.7
3.12%
0.00bps
54.14
66.87
23.51%
35.19
4.28%
0.00bps
53.17
58.22
9.50%
52.58
4.58%
0.00bps
12.42
14.88
19.81%
13.91
3.52%
0.00bps
Total
S&P500Weight
Under/Overweight
15.50%
16.19%
-0.69bps
˜S&P 500 Weight
o 16.19%
˜SIM Weight
o 15.50%
˜Underweight
o 69 Basis points
˜Recommendation
oHOLD
˜Interest rates rising
in
December
˜Strengthening economy
o
But Long bull market
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•
•
•
•
Ticker:NYSE:AXP
CurrentPrice:$73.26(October 30th 2015)
InitialPrice:$75.70à $317,940
TargetPrice:$81.58(11.36%upside
potential)
• Recommendation:HOLD
CompanyDescription:
AmericanExpressCompanyisaglobal paymentandtravel
company.Thecompany’sPrincipal Productsandservicesare
chargeandcreditpaymentcardsproducts andtravel-related
servicesoffered toconsumers andbusinessaround theworld.
12MonthSharePrice
Economic/MacroDrivers
•
•
•
•
USDisposable Income
PersonalSavings
Consumer Confidence
Consumer Spending Growth
Advantages
Risks
• Closed Loop network
• Affluent Customer Base
• Profitable Performance
• Credit Risk
• Fraud
• Negative Economic Drivers
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KeyCommunity Bankservesindividualsandsmalltomid- sized
businessesby offeringservicesincludingdeposit,investment,lending,
creditcardandpersonalizedwealthmanagementproductsandbusiness
advisory services.
MarketProfile
KeyCorporate Bankofferstoitsclientsbankingandcapitalmarkets
products includingsyndicatedfinance,debtandequitycapitalmarkets,
commercialpayments,equipmentfinance,commercialmortgagebanking,
CMBS,derivatives,foreignexchange,financialadvisory, andpublicfinance.
52WeekRange
$12.04-$15.7
P/E
12.5
Beta
1.35
Dividend Yield
2.10%
ROE
8.84%
ROA
1.01%
MarketCap
$11B
40%
SharesOutstanding
835M
30%
Asset
$93.8B
Employees
13590
ATM
1287
Branches
994
2015Revenue
60%
50%
20%
10%
0%
Key Community
Bank
Key Corporate
Bank
Other
Opportunities
˜ Merge and acquisition
˜ Regional expansion
˜ Pending interest rate
Risks
˜ Uncertainties in global economy
˜ Regulation burdens
KeyCorp
S&p500
52WeekRange:$12.04-$15.7
CurrentPrice:$12.42
TargetPrice:$14.88
UpsidePotential:19.81%
Recommendation:HOLD
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·
·
·
Ticker:NYSE:WFC
CurrentPrice:$54.14 (October 30th 2015)
InitialPrice:$35.19 →$274,474
TargetPrice:$66.87 (23.51%upside)
· Recommendation:HOLD
CompanyDescription:
WellsFargo,founded in1852,isadiversified provider of
financialservicestoindividuals, businessesandinstitutions.
Thethreemainsegmentsofthebusiness are:Community
Banking, WholesaleBanking, andWealth,Brokerageand
Retirement.Thecompanyoperatesout of8,700locationswith
12,500ATMsandofficesin36countries.
Advantages
Risks
˜
˜
Headquarters located in
Earthquake prone San Francisco,
California
Economic slowdown/downturn
˜
˜
Good dividend yield with room to
grow
Strengthening economy
o Increased spending, saving and
lending
o Long bull market
˜
SensitivityAnalysis
TerminalGrowthRate
66.87
9.00%
9.25%
9.50%
9.75%
Strong competitive advantages
DiscountRate
10.00%
10.25%
10.50%
10.75%
11.00%
11.25%
11.50%
11.75%
12.00%
2.00% 83.15
80.18
77.40
74.80
72.37
70.08
67.93
65.91
64.00
62.19
60.48
58.85
57.31
2.25% 84.93
81.79
78.88
76.16
73.61
71.23
68.99
66.88
64.90
63.03
61.25
59.58
57.99
2.50% 86.84
83.53
80.46
77.61
74.94
72.45
70.11
67.92
65.86
63.91
62.08
60.34
58.70
2.75% 88.90
85.40
82.16
79.16
76.36
73.75
71.31
69.02
66.87
64.85
62.94
61.14
59.44
3.00% 91.13
87.42
84.00
80.83
77.88
75.14
72.58
70.19
67.95
65.84
63.86
61.99
60.23
3.25% 93.56
89.61
85.98
82.62
79.51
76.63
73.95
71.44
69.10
66.90
64.84
62.89
61.06
3.50% 96.21
91.99
88.12
84.56
81.27
78.23
75.41
72.78
70.32
68.02
65.87
63.85
61.95
3.75% 99.11
94.59
90.45
86.66
83.17
79.96
76.97
74.21
71.63
69.22
66.97
64.86
62.88
4.00% 102.31
97.43
92.99
88.95
85.23
81.82
78.66
75.74
73.03
70.51
68.15
65.94
63.88
WellsFargo
· Recommendation:HOLD
·
·
·
Alreadyat4.28%
Couldslightly raiseposition
Upsideisoveralong period
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MarketProfile
52WeekRange
$46.95- $60.34
P/E
12.25
Beta
1.45
Dividend Yield
0.30%
ROE
6.59%
ROA
0.78%
MarketCap
$161.7B
SharesOutstanding
2.98B
Asset
$1.8B
Employees
239,000
Company Description
Citigroup is a multinational banking and financial conglomerate that is the result of
a $70 billion merger between Citicorp and Travelers Group in 1998. Today, Citigroup
does business in four different regions — North America; Europe, Middle East and
Africa (EMEA); Latin America; and Asia — in two primary business segments —
Citicorp and Citi Holdings.
• Ticker:NYSE:C
• CurrentPrice:$54.28(November
23rd,2015)
• InitialPrice:$52.58 à $446,936
• TargetPrice:$58.22(9.5%upside
potential)
• Recommendation:HOLD
Advantages
Risks
• Biggest international
presence
• Cost cuts
• Speculated interest rate
hike
• Past economic
performance
• Chinese economy
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