Firstar Corp. shares gained 5.13% Thursday, to $29.4375, after Lehman Brothers put the banking company in its "10 Uncommon Values" portfolio.

The move, spurred by the recommendation of Lehman analyst Michael A. Plodwick, was a vote of confidence in the bank's ability to increase earnings in the wake of its recent deal to buy Mercantile Bancorp. of St. Louis.

This is the second straight year Firstar has made the Lehman list of stocks the firm predicts will beat the market in the 12 months ahead. Other big-name stocks on the list include Microsoft Corp., Ford Motor Co., Intel Corp., AT&T, and America Online.

Firstar "is continuing to develop into one of the premier banking franchises in the country," Mr. Plodwick said. "With all the deals this year, people are lumping them all together and saying: 'Prove it.' We think these guys can prove it."

Firstar's stock had declined to as low as $26.25 a share on June 24, from $30.0625 before the Milwaukee-based company announced its deal for Mercantile on April 30. The stock had made up most of that ground by Thursday's close.

Mercantile stock, moving in tandem with Firstar, rose 4.6% Thursday, to $59.75, as the Standard & Poor's bank stock index increased 0.77% and the Dow Jones industrial average increased 0.87%, to 11,066.42.

The good news for Firstar came as shares of other acquisitive banks have taken hits because of investors' nervousness over their ability to slash costs, build revenue, and integrate operations after a merger.

Shares of Zions Bancorp. of Salt Lake City dropped 10%, to $58.59375, on June 7 afterit announced a deal for First Security Corp., its hometown rival. Similarly, stock of Amsouth Bancorp of Birmingham, Ala., dropped 14%, to $24.4375 on June 1 after it announced a plan to buy First American Corp. of Nashville. Zions closed Thursday at $64.1875 and Amsouth at $22.9375.

"People have always been jittery about these big mergers," said Michael Ancell, an analyst at Edward Jones in St. Louis.

Mr. Ancell said much of the nervousness stems from First Union Corp.'s struggles to integrate its 1998 acquisition of Philadelphia-based CoreStates Financial Corp.

In the case of Firstar, Mr. Ancell said, investors have to get comfortable with the company's quadrupling in size over the last 18 months. On a pro forma basis, Firstar will be the 13th-largest U.S. banking company, with $75 billion of assets, when its deal with Mercantile closes in the fourth quarter.

Firstar's management, led by chief executive officer Jerry Grundhofer, "surpassed all expectations" by "realizing virtually all the targeted expense savings in the first full quarter of operation," Mr. Plodwick said in a report. Mr. Grundhofer's Star Banc Corp. of Cincinnati bought Firstar last year and kept the name.

Mr. Plodwick, who has a "strong buy" rating on Firstar and estimates earnings per share of $1.25 for 1999 and $1.50 in 2000, said the company's revenue growth "over the next few quarters will ease investor concerns about revenue generation."

Diana Yates, an analyst at A.G. Edwards in St. Louis, said she is impressed at the pace of the Mercantile integration, citing Firstar's 50- employee layoff announcement and expense-cutting target of $169 million through the end of next year even before the deal has closed.

Still, Ms. Yates rated Firstar's stock "maintain position" because of the company's relatively high price-to-earnings ratio of 22 and the pace of acquisitions.

"When you look at how fast the company has grown-that just adds a little more risk than we would like," Ms. Yates said. "The proof will be in the numbers."

Mr. Ancell of Edward Jones said he is looking for more information on the bank's integration timeline for Mercantile before making a move from his current recommendation of "hold." The company is scheduled to start systems conversions in the first quarter.

But there's a silver lining in the clouds for acquirers, Mr. Ancell said.

"The attention toward big mergers has been decidedly negative, and that presents an opportunity for investors looking at Firstar or First Security," Mr. Ancell said. "Some people are sorting through the numbers and realizing there are some really good companies forming here. We are seeing the consolidation of banking assets in the hands of best management teams."

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