First Chicago NBD Corp. shares advanced Wednesday after an upgrade, but other banks mostly slipped lower as the stock market retreated from recent highs on profit taking.

First Chicago was up 37.5 cents to $41.625 in afternoon trading after getting a "buy" rating from Smith Barney analyst Henry Dickson. He has a 12- to 18-month price target of $55 for the stock.

Mr. Dickson also raised his 1997 earnings estimate on the company to $5 per share from $4.80. His estimate for results this year remains $4.35.

"I basically raised my numbers for net interest revenue and trading," Mr. Dickson said. "And I think they can hold expenses constant with the merger takeout offsetting normal growth in costs."

The analyst said he believes First Chicago NBD, formed last year from the merger of the Chicago and Detroit banks, will generate significant excess capital.

Mr. Dickson defines excess capital as "beyond what is required to pay out dividends and support balance sheet growth."

The analyst has a long-term forecast for the company stretching to the year 2001, and "it appears to me that they can generate excess capital exceeding 30% of their current market capitalization."

"If that's used properly, it can be very good for shareholders, including share repurchases," Mr. Dickson said. "I think First Chicago has good capital management and will make the right choices."

"So you have a company valued attractively on a standard basis - by price-earnings - that is also valued attractively on a discounted cash flow basis and is also one of the industry's stronger generators of excess capital."

Bank stocks were otherwise down in most cases, but not as much as the overall stock market, which endured a sharp downdraft after recent record highs.

Several analysts blamed both profit taking and program trading in advance of Friday's "double witching" options expirations.

Others, however, said a combination of weak industrial earnings, ratings cuts, and disappointment with the market's recent action have made the general market appear "overbought."

Among banks, shares of Citicorp were up 75 cents to $76.75, and BankAmerica Corp. was down 62.5 cents to $70.125 in afternoon activity. NationsBank Corp. was down 50 cents to $73.375, and J.P. Morgan & Co. was down 62.5 cents to $81.875.

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