Bank Stocks: A Promising Investment Opportunity in 2023
Analysts at RBC Capital Market believe that bank stocks could thrive next year if there is a replay of 1995, when they surged 54%. The key factors for this potential growth include the end of the Fed rate hike cycle and a soft landing for the economy. Despite solid earnings and higher loan-loss reserves, banks are currently trading at low valuations. RBC recommends Bank of America, Fifth Third, Huntington Bancshares, KeyCorp, M&T, PNC Financial Services Group, Truist Financial, Valley National, Western Alliance Bancorp, Webster Financial, and Wintrust Financial as the banks to own. However, some investors remain cautious and would like to see a hard landing before getting involved in bank stocks.