Several bank stocks are trading at notably low valuations, even after the post-election rally that followed Donald Trump’s 2016 presidential victory, which briefly boosted financial markets. The Trump administration’s promises of deregulation, tax cuts, and economic expansion initially drove investor optimism, pushing bank stocks higher. However, many of these stocks remain undervalued relative to their earnings, presenting potential opportunities for investors seeking bargains in the financial sector.
Here are 11 bank stocks that analysts identified as having low valuations based on their price-to-earnings (P/E) and price-to-book (P/B) ratios. These companies range from regional banks to larger financial institutions, all of which have maintained strong fundamentals despite market volatility:
- Bank of America (BAC) – One of the largest U.S. banks, with diversified revenue streams, showing resilience in consumer and investment banking.
- Wells Fargo (WFC) – A major bank with strong brand recognition, although recent scandals had impacted its valuation.
- Citigroup (C) – With a large global footprint, Citigroup trades at a discount relative to peers, offering growth potential.
- JPMorgan Chase (JPM) – Known for strong management and steady performance, JPMorgan remains attractive due to its balanced portfolio.
- Goldman Sachs (GS) – Valued for its investment banking prowess, Goldman Sachs is priced attractively compared to its growth outlook.
- PNC Financial Services (PNC) – A strong regional bank with consistent growth, trading at lower valuations compared to national banks.
- U.S. Bancorp (USB) – Known for conservative risk management, making it a steady investment.
- BB&T Corp (now Truist Financial, TFC) – Following its merger with SunTrust, BB&T is well-positioned in the regional banking sector.
- M&T Bank (MTB) – A regional player with a focus on mid-Atlantic markets, trading at an attractive P/E ratio.
- Regions Financial (RF) – Focused on the Southeastern U.S., with strong ties to local economies and attractive valuations.
- KeyCorp (KEY) – A Cleveland-based bank with stable revenue streams, offering value relative to other regional banks.
These banks, despite experiencing temporary market gains after the 2016 election, still present appealing entry points for investors due to solid fundamentals and low valuation metrics. Many analysts believe these stocks could benefit from further deregulation or economic growth, though market risks and regulatory uncertainties remain factors to consider.
