I guess this pump didnt work today: Goldman Sachs Upgrades Large U.S. Banks to ‘Neutral’
By Christine Harper and Sarah Jones
May 21 (Bloomberg) -- Goldman Sachs Group Inc. upgraded large U.S. banks to “neutral,” saying strong mortgage and capital markets earnings will likely continue into the second quarter and new capital raised reduces leverage.
U.S. trust banks were upgraded to “attractive,” as the Goldman Sachs analysts led by Richard Ramsden determined revenue will recover from the first quarter. The analysts also raised their recommendation for U.S. credit card companies to “neutral” and reiterated their “cautious” stance on U.S. regional banks, which are “not out of the woods yet.”
Bank of America Corp., the biggest U.S. bank by assets, has more than tripled in New York Stock Exchange trading since hitting a low on March 6, while JPMorgan Chase & Co., the second largest, has more than doubled in the period. Regulatory stress tests of the 19 biggest U.S. lenders led firms to raise more than $100 billion in capital, the Goldman analysts said.
“While the outperformance of large banks versus regionals has been in evidence since early March, we believe this will continue,” the report said.
Regional bank stocks haven’t kept up with the large banks in recent months, with Cleveland-based KeyCorp down 7 percent from March 9, Atlanta-based SunTrust Banks Inc. up 50 percent and Birmingham, Alabama-based Regions Financial Corp. also up 50 percent. Goldman Sachs analysts have sell ratings on Zions Bancorp., Marshall & Illsley Corp., Huntington Bancshares Inc., Comerica Inc., City National Corp. and BB&T Corp.
Among individual large lenders, Goldman Sachs has a “conviction buy” rating on Bank of America and JPMorgan, a “buy” on Morgan Stanley and “neutral” ratings on PNC Financial Services Group Inc., U.S. Bancorp and Wells Fargo & Co. The analysts don’t have a rating on Citigroup Inc., the third-biggest bank by assets.
bloomberg.com |
