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Financials have been on a tear lately, and some stocks in the space could break out. The S & P 500 financial sector has advanced more than 16% this year and nearly 4% over the past month. It’s also jumped 7% during the third quarter, outperforming the S & P 500’s 0.3% increase. The sector has derived optimism from an expected Federal Reserve rate cut later this month, with many anticipating the U.S. economy to stave off a potential recession. If history is any indication, lower rates should give banks a boost. Wells Fargo noted that banks fall an average of 6% in the week following the first rate cut of a cycle. From that low, however, the segment averages a 21% pop. The recent outperformance in financials also comes during a tough period for the broader market. The S & P 500 and the Nasdaq Composite are both down more than 2% in September. Against this backdrop, we used the CNBC Pro Stock Screener tool to find financials stocks that are well liked by analysts and expected to do well going forward. Here’s the criteria used for the screener: Stocks are members of the S & P 500 financials sector Analysts maintain a consensus buy rating Average analyst price targets imply at least 10% upside ahead KKR made the list. Shares have advanced roughly 40% in 2024, and the average price target implies nearly 17% upside ahead. Redburn Atlantic initiated KKR late last month with a buy rating and lauded the private equity giant’s efforts to diversify its business. These include its acquisition of Global Atlantic, which was completed earlier this year , as well as the company’s growing list of assets. KKR YTD mountain KKR stock. “We forecast KKR to grow AuM [assets under management] and fee-generating AuM at a mid-teens CAGR [compound annual growth rate] over the next half-decade, with broad-based growth reflecting the scale and breadth of KKR’s asset class capability,” analyst Nicholas Watts said. Wells Fargo also made the list. Shares of the consumer banking giant have advanced more than 8% in 2024. Analysts surveyed by LSEG expect nearly 16% upside for the stock moving forward. Deutsche Bank upgraded the stock to buy last week, citing an attractive entry point following a pullback. WFC YTD mountain Wells Fargo stock. “Recent weakness has created a better entry point in our view. In the near term, one could argue there’s been a fair amount of de-risking given the lowered outlooks on both net II and capital (on the July call) and as regulatory risks seem more priced in than they did a few months ago,” analyst Matt O’Connor said in a Sept. 2 note. Elsewhere, Bank of America also made the list. The stock has surged about 15% in 2024, and analysts expect roughly 17% upside ahead according to those polled by LSEG. Deutsche also upgraded BofA last week, saying the pullback stemming from Berkshire Hathaway selling the stock has created a buying opportunity . BAC YTD mountain Bank of America stock.
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https://www.cnbc.com/2024/09/11/financials-have-been-on-fire-lately-these-stocks-are-expected-to-fly-higher-from-here.html
