Best Bank Stocks To Buy In May

Key Insights

• Many bank stocks are trading near yearly lows. 

• Meanwhile, analyst estimates for some bank stocks are moving higher. 

• As a result, bank stocks like JPMorgan and Bank of America are trading at attractive valuation levels. 

Bank stocks have mostly moved together with S&P 500 in recent weeks, so they are trading near yearly lows. Worries about inflation and the potential slowdown of the economy are the key bearish catalysts for the stocks in this market segment. At the same time, earnings estimates for some banks have moved higher in recent weeks, so analysts are not as skeptical as traders.

JPMorgan Chase

JPMorgan stock has recently touched yearly lows near $117.50 and is currently trying to rebound. Analysts expect that JPMorgan will report earnings of $11.03 per share in 2022 and $12.56 per share in 2023, so the stock is trading at less than 10 forward P/E.

Importantly, analyst estimates have been moving higher in recent weeks, while the stock has been moving lower. As a result, the stock is down by more than 20% since the start of this year, which may attract speculative traders who are willing to bet that the major pullback is over.

Bank of America

Bank of America is also trading at less than 10 forward P/E, which is not surprising as the stock has just rebounded from its yearly lows.

As in JPMorgan’s case, the market has completely ignored rising analyst estimates, and Bank of America stock has been under pressure together with the broader market.

At this point, it looks that the market is ready for a weak second quarter in the U.S. economy, while analysts do not believe that this would be the case. If analysts are right, JPMorgan stock would be able to gain sustainable upside momentum in the upcoming months.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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