JPMorgan's Investor Day has read-throughs for banks in general, BofA says

2024-05-23 01:46

JPMorgan Chase's (NYSE:JPM) outlook and observations expressed at its Investor Day on Monday has implications for the rest of the banking industry, Bank of America Securities analyst Ebrahim Poonawala said in a note to clients on Wednesday.
He has four main takeaways: credit quality is holding up; deposit pressures are contained; investment banking momentum is continuing; and AI could redefine the industries cost structure.
With that, the analyst sees stable-to-rising EPS driving stocks higher. "Mega-cap banks better reflecting an improving EPS outlook, regionals could play catch-up. SMID-caps to also benefit from M&A pick-up," Poonawala commented.
BofA highlighted Buy-rated stocks: Truist (NYSE:TFC), US Bancorp (NYSE:USB), Huntington Bancorp (NASDAQ:HBAN), M&T Bank (NYSE:MTB), Fifth Third Bancorp (NASDAQ:FITB), KeyCorp (NYSE:KEY), First Horizon (NYSE:FHN), East West Bancorp (NASDAQ:EWBC), and First Bancorp (NYSE:FBP).
He also raised his price target on JPMorgan's Wall Street peer, Goldman Sachs (NYSE:GS) to $525, a Street high, from $478 "on higher assigned multiples driven by re-rating in market multiples and increased probability for upside to our EPS forecast." Goldman is poised to benefit from improved execution in profitability and growing asset/wealth revenues, secular themes such as private credit and AI, and capital flexibility, he added.

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