Investors may have reason to warm up to regional bank stocks. The liquidity crunch that started at Silicon Valley Bank, spilled over to First Republic and weighed on peer institutions’ shares was still recent enough to give Wall Street pause for pouring into regional bank stocks. But the SPDR S&P Regional Bank ETF (KRE) is showing some signs of strength. Regional bank funds are up nearly 17% in the past month. While the KRE remains well below crisis-era lows from early May, some regional bank stocks appear to have convinced analysts that the worst is over. KRE 1M mountain Regional Bank ETF for the past month. CNBC uses FactSet data to screen regional bank stocks that meet the following criteria: At least six analysts cover the stock At least 55% of analysts maintain a Buy rating Implied upside to analyst price targets of 25% or more Valley National’s The stock has fallen more than 25% since the beginning of the year. While the bank is feeling the pinch from a broader regional banking crisis, analysts aren’t fleeing the stock. On Monday, JPMorgan upgraded Valley National to overweight from neutral, citing the firm’s claim that the vulnerability from a weak commercial real estate loan market is unwarranted. VLY YTD mountain Valley National stock is down more than 25% from the start of the year. More broadly, 70% of analysts surveyed by FactSet maintain a buy rating on Valley National stock, including 11 analysts who cover the company. The average price target implies an upside of more than 25% from current trading levels. Meanwhile, Western Union has analysts looking even more bullish. 93.3% of analysts surveyed by FactSet rate Western Union stock a buy despite its shares being sold during the regional banking crisis. Shares are down 34% in 2023. WAL YTD Mountain Western Alliance stock has retreated 33.3% since the beginning of 2023. Analysts’ average price target implies an upside potential of nearly 40% for Western Alliance stock. Shares of Citizens Financial have fallen about 28% since the start of 2023. The company said on Wednesday it would no longer offer indirect auto loans to optimize its balance sheet and strengthen banking relationships with customers. Of the analysts covering the stock, 56.5% rate it a Buy, and the average price target implies an upside of more than 26%. CFG YTD mountain Citizens Financial has focused on strengthening client relationships in recent months and recently suspended indirect auto loans. Old Second Bancorp is the top pick on this list, as 100% of the six analysts covering the stock rate it a Buy. The average price target implies an upside of nearly 27% from current trading levels. Shares are down about 16% from the start of the year.
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