Jefferies bullish on major US banks but downgrades regional ahead of Q2 results

Hancock Whitney

11/07/2023 11:07

** Shares of U.S. big banks JPMorgan Chase & Co  JPM.N ,
Goldman Sachs Group  GS.N , Morgan Stanley  MS.N  up between
0.1% and 1% premarket
    ** Brokerage Jefferies upgrades JPM ahead of second quarter
earnings 
    ** Also prefers Goldman Sachs, Morgan Stanley, Bank of New
York Mellon  BK.N  and State Street Corp  STT.N  as ways to have
exposure with less net interest income (NII)/credit risk and
better capital positioning
    ** However, downgrades regional banks Truist Financial Corp
 TFC.N , Zions Bancorporation NA  ZION.O , Hancock Whitney Corp
 HWC.O  to "hold" on NII/EPS revisions
    ** TFC down 1.1% and ZION down 1.4% premarket
    ** Banks continue to face multiple uncertainties, including
normalization of credit, and finalization of regulatory rules - 
Jefferies
    ** Adds valuations of banks remain way below historical
averages, but the near-term outlook is clouded by downward EPS
revisions 
    ** YTD, JPM up 8.24%, GS and MS down 7.84% and 1.91%,
respectively vs S&P 500 banks index  .SPXBK  down 9.1% this year
    ** TFC and ZION down 25.2% and ~40% YTD, respectively
 

 (Reporting by Rupali Chaudhary in Bengaluru)
 ((Rupali.chaudhary@thomsonreuters.com))