Banc One Corp.'s stock, which has languished since its agreement to buy First U.S.A. Inc., is poised to rally, according to Dillon Read analyst Anthony Davis.

The banking analyst raised his rating on the company to "buy" from "outperform." His 12-month price target is $66 per share. The shares slipped $1.25, to $55 Monday, a mixed day for bank issues.

"We believe the stage is set for Banc One to once again emerge as a darling of Wall Street," Mr. Davis said in a written report.

His action came after an upgrading of the stock by Bear, Stearns & Co. Aug. 15 and a reiterated buy rating by Keefe, Bruyette & Woods Inc. last Thursday.

The acquisition of credit card issuer First U.S.A., which closed June 30, and the completion of a nationwide reorganization of business units should help the Columbus, Ohio, banking company boost earnings by 40% in 1998, then 15% annually over the next five years, Mr. Davis said. He said that the company's worst credit card losses are behind it.

Though Mr. Davis said Banc One's growth will not depend on further acquisitions, a persisting rumor that it may enter the New Orleans market has sprung up again. The rumor was initially spurred by the bank's purchase of Baton Rouge, La.-based Premier Bancorp in 1995.

According to veteran bank analyst Thomas Hanley of UBS Securities, New Orleans is one the next hot merger markets, and a deal "is getting close" for First Commerce Corp.

First Commerce, a 9 billion-asset bank headquartered in New Orleans, could command $72 a share in a takeout bid, "between now and early fall." First Commerce Corp.'s stock dropped 6 cents on Monday, to $50.68

Mr. Hanley said Banc One Corp., which needs to fill a gap in its Louisiana branch system, could be a suitor.

"It doesn't make sense for Banc One to be in Louisiana if it's not in New Orleans," said Michael Granger, Fox Pitt, Kelton. And he said there's "only two legitimate banks worth buying" in the state-the other being Hibernia Corp.

Analysts also note the First Commerce could be attractive to banks with a presence in Texas, such as NationsBank Corp. and Chase Manhattan Corp.

Mr. Davis said he "wouldn't be surprised" by a deal by Banc One, conceding that Banc One "needs more market share in Louisiana." But after a visit to Banc One headquarters last week, he said company executives indicated that mergers were not on the agenda.

Mr. Davis said the company can continue earnings growth of about 15% through the year 2000 without a merger, and argued that a deal would distract the bank from extracting all the benefits of its First U.S.A. acquisition.

"Banc One can't dictate when deals are done," Mr. Davis said. "If managements become interested in cashing out, or someone else makes an overture to a bank on Banc One's radar screen, they would have to make decision."

Elsewhere, it was a listless day of trading on Monday. The Standard & Poor's index fell 0.31% to 576.39. The S&P 500 lost 0.37% to 920.15, while the Dow Jones industrial average dropped 28.34 points, or 0.36%, to 7,859.57.

Investors await economic data on July durable goods orders and August consumer confidence, to be released today.

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