3 Goldman Euro Bank Upgrades
NEW YORK (TheStreet) -- Goldman Sachs' European equities research team recently added three banks as recommendations to a sector list the strategists argue will benefit from improving creditworthiness in the "peripheral Eurozone," a term used to refer to Portugal, Ireland, Italy, Greece and Spain.
Goldman's strategists further argue banks are "one of the least expensive sectors in the market and the trade-off between their growth prospects and earnings in the next few years looks especially attractive," according to a Feb. 3 report.
Goldman already had a positive view on global European banks, but was more bearish on domestic retail banks, especially in the periphery.
"We believed that the global banks (large by market cap) were better positioned in terms of balance sheet strength and also had diversified revenue streams that enhanced the prospects for loan growth. In general, domestic retail banks, meanwhile, have weaker balance sheets and faced mature end markets that were de-leveraging," the report states.In the U.S., Goldman's bank analysts recommend Citigroup (C) and JPMorgan Chase (JPM) among large-cap bank names and Huntington Bancshares (HBAN), Banco Popular (BPOP) and East West Bancorp (EWBC) when it comes to regional bank stocks. As for Goldman's European analysts, they already had buy ratings on several stocks, including Swiss bank Jules Baer, Sweden's SHB, Spain's BBVA , France's Societe Generale, and Belgian-based lender Dexia. They also had conviction buys on Erste Bank in Austria, France's BNP Paribas, and U.K.-based HSBC (HBC) and Lloyds Banking Group (LYG). However, they suspended ratings and price targets on Allied Irish Banks (AIB) and the Bank of Ireland (IRE) citing "limited visibility over the banks' fundamentals, pending reforms of the financial sector and macro recovery outlook." Goldman's European bank analysts also got more bullish on three stocks in a sector outlook published at the start of the month. Here are those stocks.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV