Nvidia developing new China-specific AI chip, more powerful than H20 - report
On Monday, Keefe, Bruyette & Woods, a notable financial services research firm, highlighted an investment opportunity in the banking sector following a recent decline in risk assets. The firm’s analyst, Christopher McGratty, has identified four bank stocks with strong potential, recommending investors to buy shares of Bank of America (NYSE:BAC), Old National Bancorp (NASDAQ:ONB), South State Corporation (NASDAQ:NYSE:SSB), and UMB Financial Corporation (NASDAQ:UMBF).
McGratty’s endorsement comes in the wake of a downturn in bank stocks, with both the KBW Bank Index (BKX) and the Regional Banking Index (KRX) experiencing declines of 9% and 6% respectively over the past week. These drops have effectively reversed the gains made since the post-election rally associated with former President Trump’s tenure.
The recommendation to buy is based on McGratty’s assessment that the valuation of these banks has become particularly attractive due to the sell-off. He emphasizes that despite the recent risk-averse behavior in the market and fading sentiment towards bank stocks, there is an opportunity to invest in these high-conviction, Outperform-rated banks.
In his analysis, McGratty also discussed the broader economic context, noting a slight increase in the probability of a recession, which has risen from 20% to 25%. However, he maintains a selective constructive outlook on the sector. He has previously expressed views on a narrowing earnings per share (EPS) range for banks in 2025, indicating a cautious yet optimistic stance on the industry’s future performance.
Investors who follow McGratty’s guidance will be looking to capitalize on the current market dynamics, betting on the long-term value of these selected bank stocks despite short-term market fluctuations and economic uncertainties.
In other recent news, UMB Financial Corporation reported strong financial results for Q4 2024, surpassing analyst expectations. The company posted earnings per share of $2.49, exceeding the forecasted $2.26, and revenue reached $434.18 million, surpassing the anticipated $411.97 million. This robust performance was marked by a significant increase in net interest income, which topped $1 billion with an 8.7% increase quarter-over-quarter. Additionally, UMB Financial is set to close its acquisition of Heartland Financial (NASDAQ:HTLF) on January 31, 2025, a move that has drawn attention due to potential integration challenges. Citi analysts recently downgraded UMB Financial’s stock from Buy to Neutral, citing concerns over the integration and performance of Heartland Financial, which is perceived to introduce operational and credit risks. Despite these concerns, UMB Financial’s strategic initiatives and market expansion efforts have positioned it well against industry competitors. The company anticipates realizing full integration benefits from the Heartland acquisition by 2026, with a focus on market expansion and talent acquisition.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.