Shares of Bank of America Corp. (BAC), Citigroup Inc. (C) and Goldman Sachs Group Inc. (GS) all rose in premarket trading Friday, after analyst Brian Kleinhanzl turned bullish on the universal banks, as he expects them to benefit more from an extended economic growth cycle that they will be hurt by expected interest rate cuts by the Federal Reserve. He raised his rating on the banks to outperform from market perform, and lifted his price targets to $36 from $32 for BofA, to $86 from $74 for Citi and to $260 from $225 for Goldman. Kleinhanzl also raised his rating on the universal bank sector to overweight from market weight. "We believe that fed easing--with a fed focus on sustaining economic growth--will be beneficial over the intermediate term for universal bank stocks and expect the group to outperform as earnings estimates are revised higher in the coming months," Kleinhanzl wrote in a note to clients. He also raised his stock price targets for J.P. Morgan Chase & Co. (JPM) to $134 from $128, for Wells Fargo & Co. (WFC) to $49 from $44 and for Morgan Stanley (MS) to $51 from $48. The SPDR Financial Select Sector ETF (XLF) has gained 1.1% over the past 12 months, while the Dow Jones Industrial Average has advanced 6.3%.
-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
July 26, 2019 08:47 ET (12:47 GMT)
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