Cramer’s top three bank stocks for 2023

A handful of bank stocks will do well next year if the Federal Reserve doesn’t push the U.S. economy into a severe recession – that’s according to the famed investor Jim Cramer.

Here are the top three bank stocks he recommends owning for 2023.

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Wells Fargo & Co (NYSE: WFC)

On Tuesday, we reported that Wells Fargo has agreed to a $3.70 billion settlement with the Consumer Financial Protection Bureau.

Now that the related overhang has been removed, Cramer expects this stock to be a “great turnaround story”.

He recommends owning shares of Wells Fargo at current levels – down more than 30% versus their year-to-high if you believe in the possibility that the Fed won’t overshoot in 2023.

Morgan Stanley (NYSE: MS)

Cramer dubs Morgan Stanley his top bank stock for the coming year, particularly because the inflation seems to be coming down. Last night on Mad Money, he said:

The more the Fed tones down inflation, the more I want to stick with a company that makes its best numbers when we get 4.0% unemployment and 4.0% inflation.

Lower valuation and a lucrative dividend yield makes it all the more attractive to buy Morgan Stanley stock, he added.

Goldman Sachs Group Inc (NYSE: GS)

2022 was as bad as it gets for the initial public offerings and merger deals. Still, Goldman Sachs held its own – and it’ll only get better once IPOs and M&A picks up next year.

The multinational investment bank handily topped Street estimates in its recent financial quarter.

Last week, a CNBC report said Goldman Sachs planned on lowering its global headcount by 8.0% in January.