Piper Sandler analyst weighs in on the banking sector ahead of Trump 2.0 backdrop. In the context of a more favorable backdrop coupled with higher stock prices, the analyst identified Citigroup (NYSE:NYSE:C) as an attractive value proposition with an Overweight (OW) rating.
Moreover, the firm gave a special mention to Old National Bancorp (NASDAQ:ONB), also rated Overweight, particularly following its recent acquisition of Bremer Financial Corporation.
While the firm does not expect a mid-quarter update specifically from Old National Bancorp, the transaction is seen as a positive move within the mid-sized bank space. To access detailed valuation metrics and comprehensive analysis of these banking stocks and others, visit InvestingPro.
The recovery in investment banking (IB) that has been observed this year is expected to continue, and the analyst predicts that commentary on this will be constructive. Although it is premature to witness a surge in loan demand reflected in the numbers, the tone is likely to be optimistic regarding commercial and industrial (C&I) loans into the next year. The analyst noted that there are few negative aspects to highlight in the banking group's narrative at this time.
In other recent news, Wells Fargo (NYSE:WFC) has experienced a series of significant developments. CFRA has increased the bank's stock price target to $92 from $75, reflecting a 16.0 times multiple on projected earnings per share (EPS) for 2025, and reaffirmed a Buy rating.
The bank's EPS forecasts for 2024 and 2025 have been revised to $5.47 and $5.76 respectively, based on recent performance improvements. Wells Fargo has also reported a significant increase in investment banking fees, which are expected to extend into 2025.
Citi has maintained a Neutral rating on the bank's shares, adjusting the price target from $67.00 to $82.00. Wells Fargo's CEO, Charlie Scharf, announced potential losses ranging from $2 billion to $3 billion in the commercial real estate office loan portfolio over the next three to four years. The bank has set aside reserves for these potential losses.
Wells Fargo has declared a quarterly dividend of $0.40 per share. The bank's shares were recently upgraded from Neutral to Accumulate by Phillip Securities, who also increased their price target. Wells Fargo has reported a 12% increase in non-interest income, partly due to higher investment banking fees and robust trading revenue.
Wells Fargo has significantly increased its contributions to organizations influencing state elections, with donations tripling over the last decade. These are some of the recent developments involving Wells Fargo.
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