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Why BofA Is Raising Price Targets For Banks

Priya Nigam
·2 min read

BofA Securities is raising its price targets for large cap banking stocks by around 15% on average, reflecting an improved economic outlook. 

The US Banks Analyst: Erika Najarian said in a note that banking stocks recorded significant gains this week after a positive update on Pfizer Inc’s (NYSE: PFE) coronavirus vaccine study.

The US Banks Thesis: Bank stocks were also boosted by the removal of the election overhang, while a split Congress indicates that there may not be any meaningful shift in tax and regulatory policy, the analyst said.

“Although it may be too early to play the 'return to normal' card, bank management commentary at our 29th annual Future of Financials conference this week shared a relatively optimistic tone about the economic outlook and emphasized balance sheet strength, the resiliency in operating income, and a strong recovery in EPS given high levels of loan loss reserves,” the analyst said. 

“Government stimulus and payment deferral programs have supported the resiliency of the US consumer, delaying the expected realization of peak loan losses to 2H21.” 

The analyst raised the price targets for:

  • Wells Fargo & Co (NYSE: WFC) from $27 to $32

  • Citigroup Inc (NYSE: C) from $70 to $79

  • JPMorgan Chase & Co. (NYSE: JPM) from $117 to $131

  • Truist Financial Corp (NYSE: TFC) from $50 to $57

  • Citizens Financial Group Inc (NYSE: CFG) from $32 to $37

  • Comerica Incorporated (NYSE: CMA) from $45 to $53

  • Fifth Third Bancorp (NASDAQ: FITB) from $28 to $32

  • First Republic Bank (NYSE: FRC) from $145 to $154

  • Huntington Bancshares Incorporated (NASDAQ: HBAN) from $11 to $13

  • KeyCorp (NYSE: KEY) from $13 to $15

  • M&T Bank Corporation (NYSE: MTB) from $120 to $132

  • PNC Financial Services Group Inc (NYSE: PNC) from $138 to $150

  • Regions Financial Corp (NYSE: RF) from $14 to $16

  • US Bancorp (NYSE: USB) from $41 to $44

  • Zions Bancorporation (NASDAQ: ZION) from $37 to $41

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