JPMorgan Chase downgrades three regional banks

JPMorgan Chase & Co. analysts on Friday downgraded three regional bank stocks and said they’re moving their outlook for the sector to neutral based on rising expectations of a recession as well as more aggressive interest rate hikes from the U.S. Federal Reserve. JPMorgan cut its ratings on Live Oak Bancshares Inc.
LOB,
-0.83%

and Huntington Bancshares Inc.
HBAN,
+0.54%

to neutral from overweight and downgraded HBT Financial Inc.
HBT,
-2.07%

to underweight from neutral. “On LOB, while our call on the stock has been to buy at the point of maximum pessimism, with the Fed now adopting a much more hawkish posture, we now believe this point remains on the road ahead rather than in the rear-view mirror,” JPMorgan analysts said. “For HBAN and HBT, despite both companies having peer-leading [customer loyalty], they have yet to translate this premium experience into stronger top- and bottom-line growth versus peers.” Analysts said they are neutral on regional banks, partly because bank stock valuations are already discounting a 50% probability of a recession and inflation could ease back. Analysts spotlighted First Republic Bank
FRC,
+1.13%
,
Signature Bank
SBNY,
+2.87%
,
SVB Financial Group
SIVB,
+2.88%
,
Silvergate Capital Corp.
SI,
+1.81%

and Cullen/Frost Bankers Inc.
CFR,
+0.17%

as their top picks in the sector. The KBW Bank Index
BXK,
-4.61%

is down 23.6% in 2022, compared to a drop of 20.6% by the S&P 500
SPX,
+0.50%
.

Source: https://www.marketwatch.com/story/jpmorgan-chase-downgrades-three-regional-banks-2022-07-01?siteid=yhoof2&yptr=yahoo