Skip to main content

Market Overview

Keefe, Bruyette & Woods Says End Of QE Signals Start Of Good Times For Bankers


The Federal Reserve's halt to so-called quantitative easing signals an approaching rise in interest rates and wider lending margins for banks, an analyst said Monday.

Likely trends spell "good news for U.S. bank stock investors," Keefe, Bruyette & Wood's Frederick Cannon said in a note.

Assuming rates start to rise, wider credit spreads and a shift back to variable rate lending from fixed rates should boost the sector's stock values, Cannon said.

"Of course, when the Fed actually raises rates is still guesswork," Cannon added.

Cannon's current top picks Monday: JPMorgan Chase & Co. (NYSE: JPM) and Goldman Sachs Group Inc (NYSE: GS).

Cannon also launched coverage on Citizens Financial Group Inc (NYSE: CFG) with an Outperform rating and $28 target.

Citizens, a Rhode Island regional bank holding company, was spun out of the Royal Bank of Scotland Group in September in a $3 billion initial public offering.

Citizens is in the midst of a turnaround and Cannon sees the potential for a dividend hike of 18 percent in 2015 and 28 percent in 2016.

Citizens last week said its adjusted third-quarter earnings fell 38 percent while net interest income grew 6 percent.

Among banks rated at Outperform by Cannon Monday are EverBank Financial Corp. with a $21 target, Heritage Oaks Bancorp with an $8.50 target, Investors Bancorp Inc. with a $13.50 target and MB Financial Inc. with a $35 target.

Latest Ratings for CFG

Apr 2021Deutsche BankMaintainsBuy
Mar 2021Morgan StanleyMaintainsOverweight
Feb 2021Morgan StanleyMaintainsOverweight

View More Analyst Ratings for CFG
View the Latest Analyst Ratings


Related Articles (CFG)

View Comments and Join the Discussion!

Posted-In: Frederick CannonAnalyst Color News Price Target Initiation Reiteration Events Analyst Ratings

Latest Ratings

SCYXAegis CapitalMaintains40.0
ARGOBoenning & ScattergoodDowngrades
TLSAZacks Investment ResearchInitiates Coverage On7.5
TOTJP MorganUpgrades
WSOMorgan StanleyMaintains244.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at