With few signs of a significant economic slowdown in the next six to nine months, Deutsche Bank analyst Matt O'Connor sees bank stocks as oversold.
Bank stocks' bear market has persisted for about 45 weeks, declining 22% from Feb. 1 highs and is the fifth-longest bear market going back to 1966, he writes.
Most positive on brokers, such as Goldman Sachs (GS -0.1%) and Morgan Stanley (MS +1.1%) and lower-multiple regional banks, with Citizens Financial Group (CFG +0.1%) his top pick; flags "market sensitive" banks--Bank of America (BAC +0.7%), Citi (C -0.4%), Goldman, JPMorgan (JPM +0.2%), and MS.
Goldman's $5B+ growth efforts, FICC turnaround, healthy investment bank fees, strength in equity I&L provide upside.
Previously: Morgan Stanley sees slower loan growth for midcap banks (Dec. 11)
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