Chart o’ the Day: The Case for Big Bank Stocks

Wells Fargo this morning, upgrading the entire large cap bank sector after an already large relative outperformance streak in 2016:

We see up to 26% EPS upside potential for the banks in 2018 – driving double- digit P/E discounts to historical levels. Our multi-factor analysis of potential benefits from the incoming GOP legislative priorities suggest the potential for 26% EPS improvement vs. our current 2018E EPS estimates. On a probability-weighted basis, potential EPS upside is 12%. Lower corporate tax rates drive the majority (60%) of EPS upside. We estimate the prospective positive EPS revisions leave pro-forma 2018 P/E multiples at 11.5x and 10.1x, respectively, 10% and 20% below the group’s 25 year average P/E of 12.7x.

There’s a lot of wishful thinking baked in here in terms of the President’s policy ideas. But the valuation idea is real enough.

Here’s what that looks like:



Upgrading Large-Cap U.S. Banks To Overweight From Market Weight
Wells Fargo – January 9th 2017

What's been said:

Discussions found on the web
  1. is bitcoin loophole safe? commented on Sep 21

    … [Trackback]

    […] Read More Info here on that Topic: […]

  2. Bitcoin Evolution Review commented on Sep 22

    … [Trackback]

    […] Find More Info here on that Topic: […]

  3. bitcoin evolution review 2020 commented on Sep 23

    … [Trackback]

    […] Find More here to that Topic: […]

  4. Digital transformation commented on Nov 13

    … [Trackback]

    […] Find More to that Topic: […]

  5. DevOps as a Service commented on Nov 28

    … [Trackback]

    […] Info on that Topic: […]

  6. rbc royal bank canada commented on Dec 03

    … [Trackback]

    […] Information on that Topic: […]

  7. 토토사이트 commented on Dec 27

    … [Trackback]

    […] Read More Info here to that Topic: […]

  8. GPX TL709 manuals commented on Jan 22

    … [Trackback]

    […] Find More on that Topic: […]

  9. Skrota bilen ersättning Göteborg commented on Jan 23

    … [Trackback]

    […] Read More to that Topic: […]