Shares of Chase Manhattan Corp. got a lift Monday when the stock gained a spot on Salomon Smith Barney's annual list of "Exceptional Names" among publicly held companies.
Chase is the only banking company to make this year's list, which includes International Business Machines Corp., Schering-Plough, and Wal- Mart Stores Inc. among its 15 members. Last year's financial services selection-U.S. Bancorp-was not back for a return engagement. As part of the designation, Salomon's stock sellers will talk up the companies for the next year. Traders will also buy the shares for a multibillion-dollar unit investment trust that Salomon manages for individual investors.
Chase, whose shares rose $1.50, to $76.9375, on Monday, was picked from among several financial service firms nominated by banking and thrift analysts at Salomon, said Bruce Beardslee, a managing director who helped put together the list.
He declined to give specific names but did say the group of nominees included at least one other commercial bank, a couple of thrifts, and a government-sponsored enterprise-like Fannie Mae or Freddie Mac.
"We felt strongly that the financial sector be represented," Mr. Beardslee said. The group is fundamentally solid and continues to have merger potential, he said. "We figure we're in the middle innings of consolidation."
Chase has a major supporter in Salomon banking analyst Henry C. "Chip" Dickson, who calls the stock "one of our most attractive investing opportunities" and sees the shares hitting $93 within a year.
The company has been silent on the bank acquisition front since its megamerger with Chemical Banking Corp. in 1996, but may be interested in a purchase that would boost equity underwriting capabilities, Mr. Dickson said.
Mr. Dickson's firm is part of Travelers Group, which has proposed to merge this year with Citicorp to become Citigroup.
Foreign markets would be the key to realizing the revenues and customer counts that Citigroup is aiming for, said Carla D'Arista of Friedman, Billings Ramsey & Co., Arlington, Va.
Citicorp in its current form has already made significant inroads overseas and knows how to manage when foreign economies experience crises, she said in a 27-page report to clients.
"Sandy Weill really knows how to pick a global partner," said Ms. D'Arista of Sanford I. Weill, Travelers' chairman.
Citigroup is positioned for a $10 billion revenue boost as Travelers' customers tap into Citicorp products and services, she said.
The momentum will take Citigroup shares to $200 within 12 months, she asserted. Citicorp stock closed at $157.9375, up 43.75 cents, on Monday, while Travelers gained 18.75 cents, to $63.8125.
In the market on Monday, investors bid up bank stocks in anticipation of second-quarter earnings reports that start this week. The Standard & Poor's bank index was up 0.96%, and the Dow Jones industrial average gained 0.74%. The Nasdaq bank index added 0.53%, and the S&P 500 was up 0.95%. Among the leading gainers, BankAmerica Corp. added $1.6875, to $94.125; National City Corp. $1, to $71.75; and Wachovia Corp. $1.4375, to $86.