Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Bank of America removed from Wells Fargo signature list as Fed rate hike catalyst is now less so

Published 23/03/2023, 04:46 am
Updated 23/03/2023, 04:46 am
© Reuters.

© Reuters.

By Sam Boughedda

Wells Fargo removed Bank of America (NYSE:BAC) from its Signature Picks list in a note Wednesday but maintained an Overweight rating on the stock. In addition, the firm added Overweight-rated PNC Financial Services (NYSE:PNC) and U.S. Bancorp (NYSE:USB) to the list.

Analysts told investors in a note that they still recommend BAC but recognize the catalyst from Fed rate hikes is now less so, and the story is more about earnings over time.

"To us, catalysts for large-cap banks include both the elimination of the 'bank crisis discount' and, at some point, the 'recession discount.' We see more near-term upside for PNC and USB, which we now rank ahead of BAC," the analysts wrote.

Wells Fargo still believes Bank of America is a "unique beneficiary from the COVID recovery as it relates to credit, rates, capital return, and reputation as a leader in stakeholder capitalism."

"BAC is a leader in tech among banks, which should help it further grow its leading deposit share toward its goal of one-fourth in the U.S. and aid in its effort to show superior operating leverage," the analysts added. "Overall, BAC is a goliath at a time when goliath is winning."

They said that PNC is a lower-risk bank with leading technology, while USB has excelled with its prudent risk management, best-in-industry debt ratings, and earnings consistency.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.