NEW YORK ( TheStreet) -- Citigroup (C), Fifth Third Bancorp (FITB) and KeyCorp (KEY) are the top three bank picks from Deutsche Bank analyst Matt O'Connor as banks prepare to report second quarter earnings next month.
"Bank stocks could rally into earnings before stalling the rest of the summer given concerns over the macro picture and net interest margin pressure," O'Connor writes in a report published Friday. However, he believes bank stocks will finish above current prices by year-end, due to "hopefully improving capital markets, more political certainty, and hopefully less of an impact from Europe." Here are more details on his top three picks for the quarter.
O'Connor argues Citigroup shares will face a "good test" when the bank reports second quarter earnings, "as the macro environment was sluggish, but not nearly as bad as in
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