Followers | 686 |
Posts | 142406 |
Boards Moderated | 35 |
Alias Born | 03/10/2004 |
Friday, July 08, 2022 12:42:25 PM
By: TheStreet | July 8, 2022
• Financial stocks have dropped, with the S&P 500 Financials Sector Index slumping 18% year to date.
The year 2022 hasn’t been kind to financial-services stocks. The S&P 500 Financials Sector Index has slumped 18% year to date.
But as of June 27 the drop left more than 70% of the North American financial stocks that Morningstar covers undervalued. The financial-research and -services firm's analysts determine a fair value for each stock that they cover.
“The median North American financial stock trades at a 21% discount to its fair value estimate compared with a 1% discount at the end of the first quarter of 2022 and a 2% premium at the end of the fourth quarter of 2021,” Michael Wong, director of Morningstar’s equity research for North American financial services, wrote in a commentary.
So now might be a time to consider financial stocks.
To be sure, financial companies still face some headwinds. “For banks, loan chargeoffs should begin to increase, as the buffer in savings that consumers stowed away is spent,” Wong said.
“Banks also had abnormally high mortgage refinancing, underwriting, merger advisory, and trading revenue in 2020 and 2021, and these revenue streams should normalize lower over the next couple of years.”
Meanwhile, with U.S. stocks and bonds slumping, “asset and wealth managers with asset-based fees will report a drop in revenue until the markets recover,” Wong said.
But on the plus side, the Federal Reserve’s interest rate increases “benefit the earnings of many financial companies,” Wong noted.
Here are his top picks for financial stocks.
Goldman Sachs
(GS) - Get Goldman Sachs Group Inc. (The) Report
Morningstar assigns it a narrow moat and puts fair value for the stock at $430, 44% above the recently trade at $298.
“Goldman Sachs … will likely face headwinds over the next year or two, as investment banking and trading revenue normalize lower from elevated 2020 and 2021 levels,” Wong said. “We believe much of this is already factored into the stock’s price.”
In the medium term, Goldman should benefit from “initiatives that should improve the stability of its earnings, such as its push into consumer banking and changes in its investment-management business,” Wong said.
Read Full Story »»»
DiscoverGold
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Caveat emptor!
• DiscoverGold
Recent GS News
- Nike Stock Drops 14% in Pre-Market; Nokia Acquires Infinera for $2.3 Billion, and More News • IH Market News • 06/28/2024 10:50:25 AM
- Dow Dips, Nasdaq Gains, Oil Prices Rise • IH Market News • 06/26/2024 11:00:03 AM
- SolarEdge Stock Falls 13%, Wegovy Approved in China, Grail Nasdaq Debut, Apple Rejects Meta Chatbot • IH Market News • 06/25/2024 10:36:11 AM
- Trump Media Resells Stocks and Warrants; KB Home Exceeds Q2 Expectations, and More News • IH Market News • 06/20/2024 10:55:11 AM
- Fisker Files for Bankruptcy, Chegg Stocks Rise on 23% Workforce Reduction, and More • IH Market News • 06/18/2024 11:02:13 AM
- Goldman Sachs Raises S&P 500 Forecast for 2024; Disney Secures Deadpool & Wolverine in Chinese Cinemas, and More • IH Market News • 06/17/2024 10:49:12 AM
- Adobe Soars 15% Pre-Market; Visa and Mastercard Encounter Hurdles in $30 Billion Agreement, and More • IH Market News • 06/14/2024 11:21:47 AM
- iPhone Sales Skyrocket in China, Nvidia Surges in Pre-Market Following xAI Fundraising, and More News • IH Market News • 05/28/2024 11:37:48 AM
- Workday Shares Drop 12%, VF Corp Divests Assets for Cash Boost, and More • IH Market News • 05/24/2024 12:42:24 PM
- OpenAI and News Corp Seal Partnership, DuPont de Nemours Announces Division, and More News • IH Market News • 05/23/2024 11:40:51 AM
- Nvidia Profits Set to Challenge Historic High Market; GE Aerospace Announces New Hires, and More News • IH Market News • 05/22/2024 10:37:09 AM
- Ethereum ETFs Decision Nears, Peter Mintzberg Named New Grayscale CEO, and More Crypto News • IH Market News • 05/20/2024 08:12:13 PM
- Li Auto Stocks Drop Post Earnings; Calhoun Re-elected to Boeing Board, and More News • IH Market News • 05/20/2024 11:03:22 AM
- OpenAI’s Reddit Partnership Boosts Shares by 14%, Microsoft Embraces AMD Chips for AI, and More News • IH Market News • 05/17/2024 11:36:28 AM
- Chubb Stock Soars 9% with Berkshire Acquisition, AST SpaceMobile jumps 37% on AT&T deal, and More News • IH Market News • 05/16/2024 11:27:07 AM
- Walmart Corporate Job Cuts and Office Centralization, GameStop and AMC Surge, and More News • IH Market News • 05/14/2024 11:26:02 AM
- Arm Sets 2025 Target for AI Chip Development, Amazon and Microsoft Commit Billions to French Investments, and More • IH Market News • 05/13/2024 11:16:03 AM
- Meta Platforms Expands AI Ads, Apple Boosts iPhone Shipments, and More Highlights • IH Market News • 05/08/2024 12:27:48 PM
- Tesla’s April Sales Down 18% in China, Amazon’s Multi-Billion Dollar Cloud Expansion in Singapore, and More News • IH Market News • 05/07/2024 11:44:00 AM
- Perficient Stock Soars 52.9% Post-Acquisition; Luminar Declines 10% Amid Workforce Cutbacks, and Other News • IH Market News • 05/06/2024 12:09:00 PM
- Transcendia Announces Significant New Capital Investment to Support Next Phase of Growth and Value Creation Initiatives • PR Newswire (US) • 05/02/2024 04:00:00 PM
- Alphabet CEO’s Billion-Dollar Wealth, Microsoft’s $1.7B Indonesia Investment, and More News • IH Market News • 04/30/2024 11:58:40 AM
- BHP Bids $38.8 Billion for Anglo American; Biden Unveils Historic Micron Technology Deal, and More News • IH Market News • 04/25/2024 11:48:40 AM
- Paramount’s Shares Surge Following Sony and Apollo’s Joint Bid; ISS Backs Berkshire Hathaway Director Re-election, and More • IH Market News • 04/19/2024 11:31:22 AM
- Tether’s Division Restructure, Aptos-Microsoft DeFi Collaboration, and More Crypto News • IH Market News • 04/18/2024 05:59:13 PM
FEATURED Freedom Holdings Corporate Update; Announces Management Has Signed Letter of Intent • Jul 3, 2024 9:00 AM
EWRC's 21 Moves Gaming Studios Moves to SONY Pictures Studios and Green Lights Development of a Third Upcoming Game • EWRC • Jul 2, 2024 8:00 AM
BNCM and DELEX Healthcare Group Announce Strategic Merger to Drive Expansion and Growth • BNCM • Jul 2, 2024 7:19 AM
NUBURU Announces Upcoming TV Interview Featuring CEO Brian Knaley on Fox Business, Bloomberg TV, and Newsmax TV as Sponsored Programming • BURU • Jul 1, 2024 1:57 PM
Mass Megawatts Announces $220,500 Debt Cancellation Agreement to Improve Financing and Sales of a New Product to be Announced on July 11 • MMMW • Jun 28, 2024 7:30 AM
VAYK Exited Caribbean Investments for $320,000 Profit • VAYK • Jun 27, 2024 9:00 AM