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Did Oppenheimer Just Call The Bottom In Bank Stocks?

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Did Oppenheimer Just Call The Bottom In Bank Stocks?

Mid-January has been ripe with banking earnings reports, with Q4 results coming in quite lackluster for big banks.

In a note out Thursday, Oppenheimer described the industry's anticipated movements within the context of past performances.

In the past, Oppenheimer has maintained a "generally bullish stance" on financials, but following the interest rate chatter, the research firm became increasingly cautious and "had turned neutral on the stocks."

Despite this changed mentality, the firm expressed disappointment in the sector, stating, "The stocks, however, performed far worse than we imagined."

Related Link: More Big Banks In The Earnings Spotlight

Updated Earnings Outlook

According to Oppenheimer, the outlook for 2016-17 is "all reasonably consistent with what we had before," citing potential outcomes to be on the lookout for as:

  • Steady loan growth
  • Slightly higher NIMs
  • Comfortable positionality for Oppenheimer-covered banks, despite "new cyclical downturn led by energy and China ("They easily have twice as much capital and have a national footprint or they are based in regions primarily outside of the energy patch.")
  • A pickup in FICC trading, anticipated in the latter portion of 2016 "with any luck"

While Oppenheimer's outlook maintains its neutrality, the note did include an aside, "Regardless of these trends, the banks will be under ongoing pressure to cut costs, particularly BAC, where they are clearly out of whack with the industry."

Recommendations

According to the report, Oppenheimer continues to recommend the following names:

  • Bank Of America Corp (NYSE: BAC)
  • Citigroup Inc (NYSE: C)
  • Citizens Financial Group Inc (NYSE: CFG)
  • Discover Financial Services (NYSE: DFS)
  • Fifth Third Bancorp (NASDAQ: FITB)
  • Goldman Sachs Group Inc (NYSE: GS)

Latest Ratings for BAC

DateFirmActionFromTo
Apr 2021Deutsche BankMaintainsBuy
Mar 2021Morgan StanleyMaintainsUnderweight
Jan 2021Atlantic EquitiesUpgradesNeutralOverweight

View More Analyst Ratings for BAC
View the Latest Analyst Ratings

 

Related Articles (BAC + C)

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