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The Zacks Analyst Blog Highlights: Triumph Bancorp, First Financial Bankshares, Flagstar Bancorp, Investors Bancorp and Meta Financial Group

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Zacks Equity Research
·7 min read
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For Immediate Release

Chicago, IL – November 18, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Triumph Bancorp, Inc. TBK, First Financial Bankshares, Inc. FFIN, Flagstar Bancorp, Inc. FBC, Investors Bancorp, Inc. ISBC  and Meta Financial Group, Inc. CASH.

Here are highlights from Tuesday’s Analyst Blog:

Positive Vaccine Data Propels Bank Stocks: 5 Top-Ranked Picks

Since the beginning of last week, there has been a sense of optimism among the investors as the coronavirus vaccine hope added to Joe Biden winning the U.S. Presidential election.

Monday, Moderna became the second company to reveal positive data related to the vaccine it is developing. The Phase 3 study of mRNA-1273, the company’s vaccine candidate against coronavirus, disclosed vaccine efficacy of 94.5%. This comes close on the heels of a similar disclosure early last week that the vaccine was jointly developed by Pfizer and BioNTech has been found to be more than 90% effective in preventing coronavirus infections.

Thus, despite a spike in coronavirus cases across the United States, investors seem to be bullish on the latest developments. Since the announcement of favorable vaccine data on Nov 9, all three major indexes – the S&P 500, Dow Jones and Nasdaq – are up 3.3%, 5.7% and 0.2%, respectively.

Further, the S&P 500 Financials sector (which had been underperforming the markets till now) has been among one of the best performers, rallying 10.7% over the last six trading days. Likewise, SPDR S&P Regional Banking ETF and KBW Nasdaq Bank Index have jumped 18.9% and 15.3%, respectively, over the same time frame.

Why are Bank Stocks Rallying?

Banks have been among the worst performers since the coronavirus outbreak in March and resultant economic slowdown as the pandemic impeded business activities across the globe. This, along with low interest rates, (the Federal Reserve cut the rates to near-zero in mid-March to support the U.S. economy) has been weighing significantly on the bank stocks.  

Hence, the positive developments related to the coronavirus vaccine are being seen as harbingers of restoration of near-normal activities. Further, this indicates that there is a high chance that other vaccine developers like AstraZeneca, Johnson & Johnson and Novavax could find favorable results too.

If these happen, economic recovery is likely to speed up and the chances of banks facing high levels of delinquent loans will lessen. This will also lower loan-loss uncertainty, which has led banks to build billions of dollars of pandemic-related reserves.

Further, as the economy revives, demand for loan (which is faltering of late due to less appetite among businesses to grow) should increase. Thus, this will aid banks’ net interest income (primary source of revenues) and net interest margin despite a low rate environment.

Moreover, several banks had voluntarily/involuntarily suspended share repurchases and even cut dividends to conserve liquidity. Thus, with the economic recovery, banks’ capital deployment actions are expected to return to pre-crisis level. This will, in turn enhance shareholder value.

Choosing Bank Stocks Worth Betting on

Though the vaccine-related developments are good news, banks are not expected to be out of woods just yet. Distribution of the vaccine to those who immediately need it and to the larger population will take time.

Nevertheless, the latest medical breakthroughs can be seen as a big positive for the hard-hit banking sector. So, one must keep close a watch on fundamentally strong banks and make wise investment decisions to generate attractive returns in the future.

Below we present five bank stocks that have rallied more than 5% since first positive vaccine data came in and have market capitalization of $1 billion or more. Also, these banks currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Headquartered in Dallas, TX, shares of Triumph Bancorp have rallied 17.4% since Nov 6. It provides banking and commercial finance products and services to retail customers and small-to-mid-sized businesses. The company has a market cap of $1.2 billion.

Over the past month, the company’s earnings estimates for 2020 have jumped 71.3%. Further, over the next two years, the company’s earnings are expected to rise 15.2%.

First Financial Bankshares, based in Abilene, TX, provides commercial banking products and services. The company’s shares have rallied 12.6% over the past six trading sessions.

It has a market cap of $4.9 billion. Over the past 30 days, the Zacks Consensus Estimate for its current-year earnings have risen 3%. Additionally, the company’s earnings are projected to grow 15.4% over the next two years.

Headquartered in Troy, MI, shares of Flagstar Bancorp have gained 9.4% over the past six trading days. As a savings and loan company, it provides commercial and consumer banking services. The bank has a market cap of $1.8 billion.

Over the past month, the company’s earnings estimates for 2020 have moved marginally north. Further, the company’s earnings are projected to grow 65.7% over the next two years.

Investors Bancorp, headquartered in Short Hills, NJ, offers various banking products and services. The company’s shares have gained 17.3% over the past six trading sessions.

It has a market cap of $2.4 billion. Over the past 30 days, its current-year earnings estimates have been revised 12% upward. Also, over the next two years, the company’s earnings are projected to increase 23.8%.

Shares of Meta Financial Group have soared 18.1% since Nov 6. It provides various banking products and services, and also issues prepaid cards and consumer credit products. Based in Sioux Falls, SD, it has a market cap of $1.2 billion.

Over the past 30 days, the company’s earnings estimates for 2020 have moved 13.4% north. Further, the company’s earnings are projected to grow 69.7% over the next two years.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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First Financial Bankshares, Inc. (FFIN) : Free Stock Analysis Report
 
Meta Financial Group, Inc. (CASH) : Free Stock Analysis Report
 
Flagstar Bancorp, Inc. (FBC) : Free Stock Analysis Report
 
Investors Bancorp, Inc. (ISBC) : Free Stock Analysis Report
 
Triumph Bancorp, Inc. (TBK) : Free Stock Analysis Report
 
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