While the tech world continues to be dominated by the “Magnificent Seven” of Nvidia (NVDA), Microsoft (MSFT), Amazon (AMZN), Meta (META), Apple (AAPL), Alphabet (GOOGL), and Tesla (TSLA), analysts at JPMorgan (JPM) say they've identified another group of magnificent stocks that investors need to keep on their watchlists - and this elite lineup comes directly from the small- and mid-cap banking industry, of all places.
Just over a year out from the regional banking crisis, analysts Steven Alexopoulos is encouraged by the quarterly earnings from these lenders, and sees significant upside potential. Here's a look at the standout bank stocks that JPMorgan considers the “Magnificent 7” of regional lenders.
Bank Stock #1: First Citizens Bancshares
Founded almost four decades ago and based out of Raleigh, North Carolina, First Citizens Bancshares (FCNCA) is a bank holding company, meaning it owns and operates several subsidiary banks. These subsidiaries provide retail and commercial banking services across various segments, including General Banking, Commercial Banking, Rail and Corporate. Its market cap currently stands at $25.17 billion.
FCNCA stock is up 22% on a YTD basis, and offers a dividend yield of 0.28%.
Overall, analysts have a consensus rating of “Moderate Buy” for FCNCA stock, with a mean target price of $1,934 - which denotes an upside potential of about 11.6% from current levels. Out of 12 analysts covering the stock, 6 have a “Strong Buy” rating, 1 has a “Moderate Buy” rating, and 5 have a “Hold” rating.
Bank Stock #2: Western Alliance Bancorporation
With a keen focus on commercial lending and specialty finance sectors, Western Alliance Bancorporation (WAL) is a bank holding company founded in 1919 and based out of Phoenix. Its key areas of operations include Equipment Finance, Mortgage Lending, and International Banking. Its market cap is currently at $7.01 billion.
WAL's share price is down 2.7% on a YTD basis. Notably, the stock offers a dividend yield of 2.3%.
Analysts have an average rating of “Strong Buy” for the stock, with a mean target price of $76. This indicates an upside potential of roughly 19.3% from current levels. Out of 17 analysts covering WAL stock, 13 have a “Strong Buy” rating, 2 have a “Moderate Buy” rating, and 2 have a “Hold” rating.
Bank Stock #3: Live Oak Bancshares
Based out of Wilmington, North Carolina, Live Oak Bancshares (LOB) is focused on providing financing solutions to specialized markets. Their core business segments include Specialty Banking, SBA Lending, and FinTech. Its market cap is currently $1.59 billion.
LOB stock is down 21.9% on a YTD basis, and offers a modest dividend yield of 0.34%.
Overall, analysts rate the stock a “Moderate Buy,” with a mean target price of $40, which indicates an upside potential of about 12.6% from current levels. Out of 5 analysts covering LOB stock, 2 have a “Strong Buy” rating and 3 have a “Hold” rating.
Bank Stock #4: Pinnacle Financial Partners
Focused primarily in the southeastern United States, Pinnacle Financial Partners (PNFP) is a regional bank holding company founded in 2000. The bank offers a variety of financial products and services to both individuals and businesses, including checking and savings accounts, loans, wealth management services, and online and mobile banking. Its market cap currently stands at $6.43 billion.
PNFP stock is down 4.3% on a YTD basis. The stock offers a dividend yield of 1.05%.
Overall, analysts have a rating of “Moderate Buy” for the stock, with a mean target price of $95.83 - suggesting upside potential of about 14.8% from current levels. Out of 13 analysts covering PNFP, 8 have a “Strong Buy” rating, 1 has a “Moderate Buy” rating, and 4 have a “Hold” rating.
Bank Stock #5: Cullen/Frost Bankers
Created in 1977 by the merger between Cullen Bankers, Inc. and Frost Bank Corporation, Cullen/Frost Bankers (CFR) is a bank holding company. It provides a comprehensive suite of financial services for consumers and businesses, including retail banking, commercial banking, and wealth management, among others. Its market cap currently stands at $6.88 billion.
CFR stock is down 1.6% on a YTD basis. The bank stock offers a dividend yield of 3.39%.
On average, analysts have deemed CFR stock a “Hold,” with a mean target price of $117.93. That suggests an upside potential of about 9.2% from current levels. Out of 16 analysts covering the stock, 4 have a “Strong Buy” rating, 10 have a “Hold" rating, and 2 have a “Strong Sell” rating.
Bank Stock #6: Mvb Financial Corp
Based out of Fairfax, Virginia, Mvb Financial Corp (MVBF) is a financial holding company, operating primarily in the Mid-Atlantic region. Their core areas of focus include traditional community banking services for individuals and businesses, acquiring and issuing sponsorships, as well as Banking-as-a-Service (BaaS) for fintech and gaming clients across the United States. Its market cap is currently at $243 million.
MVBF stock is down 16.4% on a YTD basis, and offers a dividend yield of 3.61%.
Analysts consider the stock a “Strong Buy” overall, with a mean target price of $23.75. This indicates an upside potential of about 25.9% from current levels. Out of 4 analysts covering MVBF stock, 2 have a “Strong Buy” rating and 2 have a “Moderate Buy” rating.
Bank Stock #7: Webster Financial Corp
Founded way back in 1853, Waterbury, Connecticut-based Webster Financial Corp (WBS) is a bank holding company, operating primarily in southern New England and Westchester County, New York. The company's core services include commercial banking, consumer banking, and mortgage lending. Its market cap is currently $7.89 billion.
The WBS stock is down 9.5% on a YTD basis and offers a dividend yield of 3.48%.
Overall, analysts have a rating of “Strong Buy” for WBS stock, with a mean target price of $57.19 - which denotes an upside potential of about 24.4% from current levels. Out of 16 analysts covering the stock, 10 have a “Strong Buy” rating, 4 have a “Moderate Buy” rating, and 2 have a “Hold” rating.
On the date of publication, Pathikrit Bose did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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