A handful of U.S. regional banks collapsed in early 2023 after rising interest rates triggered a sharp decline in long-term bond prices, resulting in massive losses for banks holding certain loans on their balance sheets. U.S. regional bank stocks stabilized in the second half of 2023, but New York Community Bancorp Inc. (ticker: NYCB) recently renewed regional banking fears when the stock crashed over concerns about a disclosure related to “material weaknesses” in its internal loan review process.
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Bank stock selection is critical in 2024, so here are 10 of the best bank stocks to buy today, according to CFRA Research:
| Stock | Implied upside from March 11 close |
| JPMorgan Chase & Co. (JPM) | 0.9% |
| HSBC Holdings PLC (HSBC) | 15.8% |
| Citigroup Inc. (C) | 13.2% |
| Bank of Montreal (BMO) | 16.5% |
| PNC Financial Services Group Inc. (PNC) | 30.9% |
| Fifth Third Bancorp (FITB) | 11.7% |
| M&T Bank Corp. (MTB) | 12% |
| Regions Financial Corp. (RF) | 12.4% |
| Citizens Financial Group Inc. (CFG) | 11% |
| East West Bancorp Inc. (EWBC) | 27% |
JPMorgan Chase & Co. (JPM)
JPMorgan Chase is is one of the largest global financial services companies, boasting $3.9 trillion in assets as of the fourth quarter. Analyst Kenneth Leon says JPMorgan generated an impressive 17% return on equity in 2023. While the company has guided for net interest income, or NII, to decline to $90 billion in 2024 from $94 billion in 2023, Leon says investment banking fees will improve significantly in the second half of the year. He says the consumer and commercial loan markets remain healthy, and lower interest rates and moderate loan volume growth will be NII tailwinds. CFRA has a “buy” rating and $190 price target for JPM stock, which closed at $188.29 on March 11.
HSBC Holdings PLC (HSBC)
HSBC is one of the world’s largest banking and financial services providers and has more than 39 million customers. Analyst Firdaus Ibrahim says HSBC’s profitability will improve as long as interest rates remain favorable. Ibrahim says HSBC’s fee income growth will help the bank deliver a return on tangible equity in the mid-teens percentage range in 2024. He says the company’s capital levels suggest it can comfortably return to a dividend payout ratio of 50% and projects earnings per share of $7.25 in 2024, up from $1.42 in 2023. CFRA has a “buy” rating and $43 price target for HSBC stock, which closed at $37.13 on March 11.
Citigroup Inc. (C)
Citigroup is a diversified global bank and financial services company. Leon says Citigroup is doing an impressive job with its new strategy, which has positioned the bank to benefit from global growth in corporate and institutional banking. He says Citigroup is a market leader in technology platforms, treasury services and a growing global wealth management industry. Citigroup is also streamlining its business by aggressively cutting its workforce, eliminating management layers, exiting its consumer banking business in Mexico and divesting retail banking assets in Asia. CFRA has a “buy” rating and $65 price target for C stock, which closed at $57.41 on March 11.
Bank of Montreal (BMO)
Bank of Montreal is one of the largest Canadian commercial banks. Analyst Alexander Yokum says Bank of Montreal has an attractive geographical diversity and has limited exposure to the challenging Canadian residential real estate market. Yokum is concerned about a rising Canadian residential mortgage default rate in 2024, but Bank of Montreal’s diversification could insulate it from any major mortgage market problems. In addition, he says the company’s acquisition of Bank of the West will generate cost and revenue synergies and expand Bank of Montreal’s U.S. exposure. CFRA has a “buy” rating and $110 price target for BMO stock, which closed at $94.43 on March 11.
PNC Financial Services Group Inc. (PNC)
PNC Financial Services is one of the largest U.S. banks, offering asset management and traditional, corporate and institutional banking services. PNC shares took a hit in 2023 amid the U.S. regional banking crisis, but Yokum says the bank’s geographical diversification, valuable branch network, small average account size and strong execution make the stock an extremely attractive option. He says PNC’s 76% loan-to-deposit ratio is much better than the U.S. regional banking industry average of 84%, while its unrealized securities portfolio losses are below average. CFRA has a “strong buy” rating and $200 price target for PNC stock, which closed at $152.84 on March 11.
[READ: 7 Best Regional Bank Stocks to Consider Now]
Fifth Third Bancorp (FITB)
Fifth Third Bancorp is a U.S. regional bank that offers retail and commercial banking, consumer lending and asset management services in the Midwest and Southeast regions. Yokum says Fifth Third is less susceptible to deposit pressures than other U.S. regional banks, and its small average account size will help the bank’s non-interest-bearing deposit performance. He notes the bank has completely avoided commercial real estate net charge offs in the past year. Yokum says Fifth Third will continue to focus on growing its middle-market commercial lending. CFRA has a “buy” rating and $41 price target for FITB stock, which closed at $36.72 on March 11.
M&T Bank Corp. (MTB)
M&T Bank is a U.S. regional, commercial-focused bank offering banking, trust and investment services primarily in the Northeast and mid-Atlantic regions. Yokum says M&T will outperform peers on both a loan and a deposit perspective. He says the bank is not facing the same type of unrealized losses that many of its regional banking peers have been forced to navigate in the past 12 months. Yokum says M&T is well capitalized and is positioned to resume share buybacks in the second half of 2024. CFRA has a “buy” rating and $160 price target for MTB stock, which closed at $142.83 on March 11.
Regions Financial Corp. (RF)
Regions Financial is a U.S. regional bank that provides banking and wealth management services in 16 states in the South and Midwest regions. Yokum says Regions’ strong capital position and attractive regional exposure to the Southeast should help loan growth. He says share buybacks and a rebound in capital markets income will help boost Regions’ share price in 2024 as competing banks play defense in a challenging environment. Yokum says Regions can effectively navigate the high interest rate environment, even if expected interest rate cuts are delayed. CFRA has a “buy” rating and $22 price target for RF stock, which closed at $19.57 on March 11.
Citizens Financial Group Inc. (CFG)
Citizens Financial is a U.S. regional bank that operates in the Northeast, mid-Atlantic and Midwest regions. Yokum says he is bullish on Citizens’ recent launch of Private Bank, which will target high-net-worth clients and potentially provide access to private equity and venture capital opportunities. He is bullish on the bank’s entry into New York City and says the decision to lean into the wealth segment of the banking industry is a prudent decision that could pay off in the long term. CFRA has a “buy” rating and $38 price target for CFG stock, which closed at $34.24 on March 11.
East West Bancorp Inc. (EWBC)
East West Bancorp is a regional commercial bank that has locations in both the U.S. and China, providing consumer and commercial services. Yokum says East West’s unique business model positions it to execute well even in a challenging environment. He says East West is not suffering from the same capitalization issues and unrealized losses that are plaguing peers. While many competitors have been forced to prioritize capitalization, East West has returned to share buybacks and even raised its dividend. CFRA has a “strong buy” rating and $97 price target for EWBC stock, which closed at $76.37 on March 11.
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10 of the Best Bank Stocks to Buy for 2024 originally appeared on usnews.com
Update 03/12/24: This story was previously published at an earlier date and has been updated with new information.
