Market Overview

Deutsche Bank On U.S. Big Banks: Boosted Estimates And Price Targets

Deutsche Bank On U.S. Big Banks: Boosted Estimates And Price Targets
Related BAC
Cisco, EA, Intel: 'Fast Money' Final Trades
7 Stocks That David Tepper's Buying And 5 He's Selling
Tracking David Tepper's Appaloosa Management Portfolio - Q3 2017 Update (Seeking Alpha)
Related C
Citigroup, Home Depot, Qualcomm: Fast Money Picks For November 14
The Week Ahead For November 13: Conferences, Earnings and IPO Events To Watch
PayPal: The Growth Is Not Finished (Seeking Alpha)

Deutsche Bank raised estimates and price targets on big U.S. banks, as it expects 25–30 percent of EPS upside from stronger economic growth should drive better loan growth and fee revenues, while higher interest rates should aid net interest margins. The sector should also benefit from less regulation and lower tax rates.

Notably, DB’s U.S. economist Joe LaVorgna recently raised his real GDP growth forecasts to 3 percent in 2017 and 3.3 percent in 2018.

The brokerage also upgraded Goldman Sachs Group Inc (NYSE: GS) to Buy from Hold, saying the investment bank should benefit from a strong economy, which would boost its capital market businesses. Further, Goldman too is poised for a stronger macro environment given revenue upside, good cost control and a valuation below peers.

Banking Trends

Lead analyst Matt O'Connor noted that the bank stocks seem to be pricing in higher rates, but not a stronger economy. The BKX has gained about 15 percent since the election versus a 3 percent rise in the S&P 500.

“We sense that leverage to higher rates is mostly reflected in stock prices, but that higher lending and fee volumes from a stronger economy may not be,” O'Connor wrote in a note.

DB's Changes For The Sector

Following are the hike in price target changes for large cap financial institutions in the United States:

  • Bank of America Corp (NYSE: BAC): $23 from $17.50.
  • Citigroup Inc (NYSE: C): $61 from $49.
  • Goldman Sachs: $255 from $180.
  • JPMorgan Chase & Co. (NYSE: JPM): $90 from $73.
  • Morgan Stanley (NYSE: MS): $43 from $34.
  • Wells Fargo & Co (NYSE: WFC): $60 from $49.

Latest Ratings for BAC

Nov 2017JP MorganMaintainsOverweight
Oct 2017UBSMaintainsNeutral
Oct 2017BMO CapitalMaintainsMarket Perform

View More Analyst Ratings for BAC
View the Latest Analyst Ratings

Posted-In: Deutsche Bank Joe LaVorgna Matt O'ConnorAnalyst Color News Upgrades Price Target Analyst Ratings Best of Benzinga


Related Articles (BAC + C)

View Comments and Join the Discussion!

Partner Center