Best megacap bank stocks to buy now, according to WarrenAI

Investing.com -- Megacap bank stocks present varying opportunities for investors, with some offering significant value while others trade at premium prices. According to a recent analysis by WarrenAI using Investing Pro’s Fair Value metrics, Pro scores, technical indicators, and analyst price targets, certain banking giants stand out more than others.

The analysis reveals a clear hierarchy among the four largest U.S. banks, with value-oriented opportunities leading the pack while quality names command premium valuations. Here’s how these financial powerhouses rank:

1. Citigroup (NYSE:C) emerges as the top pick with an impressive Fair Value Upside of 32.1%, the highest among all four megabanks. The stock presents a classic turnaround/value play with solid technical buy signals and "FAIR" health ratings. Analyst price targets suggest a 9.4% upside, which, while lower than the Fair Value estimate, still represents the highest pure value among peers. Technically, Citigroup shows Buy signals on daily charts and Strong Buy indicators on weekly timeframes. Despite some overbought weekly signals, upward momentum remains the dominant force.

In other news, Fitch Ratings affirmed Citigroup’s ’A’ rating with a stable outlook. The bank is also exploring stablecoin custody services and appointed a new head to lead its private credit origination in North America.

2. Bank of America (NYSE:BAC) claims the second spot with a Fair Value Upside of 28.2%, nearly matching Citigroup’s value proposition but with even stronger technical momentum. Analyst targets confirm upside potential at 13.8%. While not offering the same deep-value opportunity as Citigroup, Bank of America stands out as a technical favorite with Strong Buy ratings across all timeframes. The stock appears overbought but enjoys strong consensus support from technical indicators and moving averages.

According to Bank of America’s own analysis, credit card delinquencies appear to have reached their peak. Additionally, the bank is one of the owners of Zelle operator Early Warning Services, which was sued by the New York Attorney General over alleged fraud protection failures.

3. Wells Fargo (NYSE:WFC) ranks third with a Fair Value Upside of 28.8%, comparable to Bank of America’s value proposition. However, mixed technical signals and a lower Pro Score place it below its peers. Analysts see a more modest 6.8% upside potential. Wells Fargo displays mixed/neutral daily technicals, neutral weekly indicators, though with some underlying strength detected in the analysis.

Wells Fargo announced plans to appoint CEO Charlie Scharf as chairman of the board. The company is also expanding its partnership with Google (NASDAQ:GOOGL) Cloud to deploy artificial intelligence agents within the bank.

4. JP Morgan (NYSE:JPM) rounds out the list as the quality leader but value laggard. Despite its reputation for size and stability, JP Morgan actually trades 12.8% above its Fair Value, making it the only overvalued stock among the four megabanks. Analysts project a modest 5.3% upside, the lowest among the group. While JP Morgan shows Strong Buy signals on both daily and weekly charts, the negative Fair Value Upside suggests limited "bargain" potential for value-oriented investors.

Following strong second-quarter results that surpassed earnings expectations, Freedom Broker raised its price target on JPMorgan Chase. The bank also recently reached a milestone by opening its 1,000th new branch as part of its 2018 expansion initiative.

Looking for a deeper dive into the bank sector, or other stocks: try WarrenAI free today here: https://www.investing.com/warrenai/

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