First Union Corp. might not be done with credit-quality problems and rising expenses, but some analysts are beginning to see light at the end of the tunnel.
Katrina Blecher, a managing director of research at Sandler ONeill & Partners, initiated coverage for the Charlotte, N.C., company with an outperform rating, saying First Union might not grow as much as management predicts but that its restructuring is moving it up the right track. Shares of First Union have been battered in the past year. They trade at a 10% discount to other superregionals, Ms. Blecher wrote in her report, reason enough to bet on a recovery. Still, Ms. Blecher did not give the stock a lot of upside potential 3% growth is her target.