RBC Issues Positive Note on Top U.S. Banks
From The RBC Note
The top 20 banks’ first quarter results reflected strong year-over-year earnings growth, robust capital positions, strong credit quality, the benefits of higher short term interest rates and lower tax rates and continued expense management.
The expected upside in stock prices should be driven by growth in the industry’s core businesses, increased levels of capital returned to shareholders, and higher interest rates. We think potential appreciation ranges from 20% to 25% for some of the top 20 banks.
Four of the top banks are rated Outperform at RBC, and all make sense for investors looking to add or increase exposure to financials in their portfolios.
Bank of America rated outperform by RBC with a price target of $35