BAC, WFC, LPLA, HOOD, KKR, ARES: Wolfe's top financial picks for 2025
Jan. 03, 2025 12:38 PM ET
By: Sinchita Mitra, SA News Editor
 tupungato/iStock Editorial via Getty Images
Wolfe Research chose Bank of America (NYSE: BAC), Wells Fargo & Company (NYSE: WFC), LPL Financial (NASDAQ: LPLA), Robinhood Markets (NASDAQ: HOOD), KKR & Co. (NYSE: KKR), Ares Management (NYSE: ARES) as its top picks for 2025.
"We believe that 2025 is shaping up to be a constructive year for the collective retail brokers, but remain selective with our preferences within the group," the analysts said in a note.
Wolfe picked LPLA as its top idea into this year, as the analysts expect a combination of higher rates/steeper curve, sweep cash growth, and best-in-class NNA to drive outperformance. Wolfe also reiterated its Outperform rating on HOOD.
"We are less constructive on the Trusts collectively, as the group is under exposed to key benefits from the Trump administration," said Wolfe.
For BAC and WFC said, Wolfe sees a number of tailwinds that support outperformance at the Money Centers.
Wolfe said it remained most constructive on both the Alternatives and Wealth Management subsectors, and added KKR, ARES were its two favorites among the Alternatives.
Wolfe Research upgraded Carlyle (NASDAQ: CG) and JPMorgan Chase (NYSE: JPM) to Outperform, and downgraded Bank of New York Mellon (NYSE: BK) & Lazard (NYSE: LAZ) to Peer Perform.
In the case of JPM, Wolfe believes the firm's NII guide is conservative, higher expense risk is well telegraphed, and share gains are unmatched.
"We prefer JPM over the Trusts as a way to play quality / defense and barbell our bank stock picks," the analysts said in a note.
For CG, Wolfe said it was growing more confident in the upside case as an improving PE backdrop should drive accelerating realization activity / increased buyback, supporting multiple convergence with peers
The brokerage firm said it continues to be positive of the BK management team, as new leadership has done an excellent job prosecuting on key initiatives, but with valuation becoming tougher to justify, downgraded it to Peer Perform.
For Lazard ( LAZ), Wolfe said "while the management is clearly focused on rectifying net outflows in LAM, we are not comfortable underwriting, an improvement in the new flow outlook, which could limit comp leverage in 2025/2026." |
