Updated with comment on U.S. Bancorp, along with a price target increase, from Bank of America Merrill Lynch analyst Erika Penala.
NEW YORK ( TheStreet) -- "The stocks are so cheap and the fundamentals so generally favorable that, in the absence of bad news, the stocks should drift higher."
That's what Oppenheimer analyst Chris Kotowski said on Sunday, when the analyst considered the strong performance for bank stocks year-to-date, and investor fears of big slides for bank stocks, like the ones seen in April 2010 and in November 2011. "Investors are becoming less skittish about bank stocks and beginning to recognize that the fundamental improvements are for real," he said, adding that "the fact that we have effectively de-coupled from the Euro stress in recent months is illustrated by the fact that the
The KBW Bank Index returned 29% year-to-date, through Monday's close at 50.77, following a 25% decline during 2011. All but two of the 24 index components saw year-to-date gains through Monday. Three of the index components saw year-to-date gains of over 50% through Monday's close, while 15 of the index components saw gains of over 25%.Of course, European-inspired nail biting is very likely to continue, as the various players negotiate a bailout for the eurozone's most troubled institutions, while also setting up a unified regulatory regime, to give the European Central Bank supervisory powers that are now enjoyed by eurozone member nations. Turning back to the U.S., Kotowski said that "looking first at the most easily quantifiable benchmark, price to tangible book value ... we can see that on average the
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