Underpriced Financial Stocks for Today's Economy
Thursday, June 23, 2021 11:56 AM



Financial stocks have grossly underperformed over the last couple of years. However, the financial market is expecting a rebound and these stocks can lead the charge.

Bank of America (NYSE:BAC) - Bank of America is a financial institution serving individual consumers, small and middle market businesses, corporations and governments with a range of banking, investing, asset management and other financial and risk management products and services. Through its banking subsidiaries and various non-banking subsidiaries throughout the United States and in selected international markets, it provides a range of banking and non-banking financial services and products through six business segments: deposits, global card services, home loans and insurance, global commercial banking, global banking and markets and global wealth and investment management.   

Value and price targets: BAC currently trades close to $11 and has a 52 week range of $10.40 to $15.91. So it’s trading close to its low end of the range. Historically BAC sells between 10-15 times earnings, however after to the financial crisis the market value was affected badly. But it has been showing continuous signs of improvement with the EPS expected to reach $1.70 by Dec ’12. Considering a multiple of 10, the expected target price of BAC is $17 per share. Both Citigroup and Credit Suisse have $18 targets on Bank of America.

Summary Snapshot

Investment Ratings

Analyst Consensus & Trends

 Strong Buy
Buy
 Hold  S U
8 8  13  0  0

BAC Highlights

First Call expects $0.28 EPS for next quarter.
The current Price Target for BAC is $16.94.

 

Goldman Sachs (NYSE:GS) - The Goldman Sachs Group Inc. is a bank holding and a financial holding company. Goldman Sachs is a global investment banking, securities and investment management company providing a range of financial services to a client base that includes corporations, financial institutions, governments and high-net-worth individuals. Its United States depository institution subsidiary, Goldman Sachs Bank USA (GS Bank USA), is a New York State-chartered bank. Goldman Sachs operates in three segments: Investment Banking, Institutional Client Services, Investing & Lending and Investment Management

Value and Price Targets: GS currently trades close to $136 and has a 52 week range of $129.50 to $175.34. GS also is trading close to the low end of the range. With an EPS estimate of $18.82 for Dec’12 and a multiple of 9.65, the target price for GS is $181. The price target placed by S&P is $156 and by Credit Suisse is $194.

Summary Snapshot

Investment Ratings

Analyst Consensus & Trends

 Strong Buy
Buy
 Hold  S U
 7  10  5  0  2

GS Highlights

First Call expects 3.39 EPS for next quarter.
The current Price Target for GS is $186.52.

 

Wells Fargo & Co. (NYSE:WFC) - Wells Fargo & Co. is a diversified financial services company. The company provides banking, insurance, investments, mortgage banking, investment banking, retail banking, brokerage, and consumer finance through banking stores, the internet and other distribution channels to consumers, businesses and institutions in 50 states, the District of Columbia, and in other countries. The Company operates in three segments: community banking, wholesale banking, and wealth, brokerage and retirement.

Value and price Targets: WFC currently trades at $27.46 and has a 52 week range of $23.02 to $34.25. It had a pretty good last year with an operating margin of 33.91 percent and a profit margin of 19.02 percent.  It has a 1.7 percent dividend yield. The expected EPS for Dec’12 is $3.40. Considering a multiple of 10, the target price for WFC is $34 per share. Credit Suisse has price target of $34 per share, and Oppenheimer has a price target of $38.

Summary Snapshot

Investment Ratings

Analyst Consensus & Trends

 Strong Buy
Buy
 Hold  S U
 6  12  9  1  2

WFC Highlights

First Call expects 0.68 EPS for next quarter.
The current Price Target for WFC is $36.28.


 

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