Morgan Stanley analyst Betsy Grasek said a Donald Trump presidency and a Republican-controlled Senate could boost big banks. Glassek believes financial stocks rose more than 6% on Wednesday following Trump’s victory, marking the sector’s best day since November 2020. Financials were also the day’s top performers, as expectations of a deregulatory push and more mergers and acquisitions under Trump boosted investor confidence in the sector. “The U.S. election suggests that a bull run in our coverage is more likely as a Republican administration brings a stable and relaxed regulatory framework,” Grasek wrote in a report Thursday, though the House races have not yet begun. , but House Republicans are optimistic they can maintain their slim majority. If they manage to retain control of the House, a sweeping Republican sweep of the executive and legislative branches “will further boost activity levels,” Grasek said. The analyst highlighted four major banks that investors should keep an eye on: Citigroup, Goldman Sachs, Wells Fargo and Bank of America. Grasek has an outperform rating on all four stocks. She pointed out that the accelerated development of capital markets should benefit all the big banks, but Goldman Sachs will benefit the most. Bank of America is also expected to benefit from increased activity. Goldman Sachs is up more than 12% so far this week. Meanwhile, Citigroup is most vulnerable to rising excess capital levels as a Republican-led administration is unlikely to increase current capital requirements. Glassek noted that Citigroup has the ability to repurchase shares below its tangible book value per share. Citigroup shares rose 7% this week. In addition, Grasek said, “With Trump’s victory, our expectation is that the Fed will likely continue to implement the final proposals of Basel 3, which means that the current capital rules will remain unchanged.” She estimated that this will lead to The largest banks in the company’s coverage now have $86 billion in excess capital. She said Wells Fargo, which rose 8% this week, would benefit from the removal of the asset cap.
Four best bank stocks to own amid Trump trade, according to analyst Graseck | Global News Avenue
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