Bank Stocks Hit All-Time Highs: Analyst Points To Further Rally On 'A 1995 Soft Landing Scenario'
Portfolio Pulse from Piero Cingari
U.S. financial stocks, including major banks and regional banks, have surged to record highs following the March FOMC meeting, driven by expectations of stronger economic growth and lower borrowing costs. Bank of America's Ebrahim H. Poonawala points to a bullish outlook for bank stocks, citing the Fed's rate cut projections and QT taper plans. The SPDR Regional Banking ETF (KRE) and the Financial Select Sector SPDR Fund (XLF) saw significant gains. Bank of America remains optimistic about Goldman Sachs (GS) and Morgan Stanley (MS), while Goldman Sachs is bullish on First Citizens Bancshares (FCNCA). Super-regional banks are also highlighted for their potential to narrow the valuation gap with major banks.
March 21, 2024 | 4:23 pm
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POSITIVE IMPACT
First Citizens Bancshares receives a Buy rating from Goldman Sachs, with a $1,950 price target, indicating strong growth potential.
FCNCA's Buy rating and high price target from Goldman Sachs suggest a very positive short-term outlook.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 85
POSITIVE IMPACT
Goldman Sachs remains a top pick by Bank of America, buoyed by expectations of increased capital market activities.
GS's positive outlook is based on Bank of America's analysis, suggesting a favorable short-term trajectory.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 80
POSITIVE IMPACT
SPDR Regional Banking ETF saw a sharp increase, over 4%, following the FOMC meeting, indicating strong investor confidence in regional banks.
KRE's significant gains reflect the market's positive reaction to the FOMC's decisions, suggesting a bullish short-term outlook for regional banks.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 85
POSITIVE IMPACT
Morgan Stanley is favored by Bank of America, expected to benefit from an upturn in capital market activities.
MS's bullish outlook from Bank of America indicates a positive short-term impact on its stock price.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 80
POSITIVE IMPACT
The Financial Select Sector SPDR Fund hit record highs, buoyed by expectations of economic growth and lower borrowing costs.
The surge in XLF is directly tied to the optimistic outlook following the FOMC meeting, indicating a positive short-term impact.
CONFIDENCE 90
IMPORTANCE 85
RELEVANCE 90