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Citi, Goldman, Regions, Truist Cut to Hold at Odeon

The impacts from coronavirus and the trade war are the reason a number of bank stocks -- Citi, Goldman, Regions and Truist -- were downgraded at Odeon.
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Banking stocks could have a rough start to the year as trade tensions and the coronavirus pandemic weigh on the sector, according to Odeon analyst Dick Bove.

As a result, Bove lowered his ratings on Citigroup  (C) , Goldman Sachs  (GS) , Regions Financial  (RF)  and Truist Financial  (TFC)  to hold from buy.

The biggest issue facing the banking sector is the potential hit to consumption and production in China from the coronavirus as governments around the world restrict travel to combat the disease.

Additionally, “trade issues have not been resolved,” as phase one of the U.S.-China trade deal hasn’t taken all the tariffs off the table, Bove said. 

Other potential headwinds that could hinder the banking sector include the Federal Reserve moving to shrink its balance sheet, weak commercial-loan growth, and slipping confidence among business leaders.

“I am concerned about the banking group because unless the economy is more robust than I think, it is likely that these companies are facing a very difficult set of commercial and banking problems,” Bove said.

Even after the downgrades, Bove still likes a number of major banks. JPMorgan Chase  (JPM)  was upgraded to buy while Bank of America  (BAC)  and SVB Financial  (SIVB)  were affirmed buy.

Shares of SVB at last check were 1.9% higher, while JPMorgan shares were up 0.7%. Bank of America gained 0.67%.

Meanwhile, Citigroup rose 1% and Goldman Sachs rose 1.1% , Regions Financial climbed 1.5% and Truist tacked on 2%.