Shares of First Union Corp. fell slightly Wednesday, though analysts expressed confidence that the company's restructuring will ultimately succeed.

Richard X. Bove, an analyst at Raymond James & Associates, reiterated his "strong buy" recommendation on the stock Wednesday but cut his earnings expectation to $2.58 a share, from $2.65. Susan L. Roth, an analyst at Credit Suisse First Boston, has a "hold" rating on the stock but wrote in a research note that she expects it to gain momentum this year.

G. Kennedy Thompson, First Union's chief executive officer, told investors at a conference in Phoenix Tuesday that the company plans to have adopted its all of its restructuring initiatives during the second quarter.

But Mr. Thompson reminded his audience that First Union's growth in 2001 would probably fall below the 10% to 12% annual rate it predicts for the next three to five years. He cited the slowing economy, a drop in revenues from venture capital, and higher expenses as reasons.

"First Union is getting closer to the point at which it, and its shares, can realize the value of what has been built," said Ms. Roth in her research note. Capital management, loan growth, and a new corporate performance-based compensation structure for high-level managers should help First Union, she said.

Mr. Bove said he felt it prudent to reduce his earnings estimate but added that, from an investor point of view, earnings are less important than the company's reorganization, which is apparently going well. His target price is $39, but he said the stock could trade in the mid-$40s once the restructuring is completed.

First Union lost 9 cents a share, or 0.28%, on Wednesday to close at $32.60.

Elsewhere in the market, analyst Lana Chan of CIBC World Markets initiated coverage of Granite State Bankshares on Wednesday with a "hold" rating.

Her lukewarm recommendation on the stock was based solely on the company's valuation, she wrote in a report. Shares of Granite State rose 15% this year and are trading now at a multiple of 12.23 times earnings per share. "Trading at 10.2 times our 2002 EPS estimate, we view GSBI shares as fairly valued relative to its estimated internal rate of growth of 9%," she wrote in her research report. Companies of similar size are trading at a multiple of 9.4, she wrote.

"For investors looking to principally participate in the consolidation of the industry, we would include Granite in a basket of potential small- and mid-cap bank targets," she wrote.

On Wednesday Granite State fell 25 cents, or 1.12%, to $22 a share.

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