NEW YORK (TheStreet) -- Large U.S. banks are seeing an increasing number of downgrades from Wall Street analysts after a lengthy period of outperforming the broader market.
The KBW Bank index had risen 6.43% over the past month compared to a 2.2% rise for the S&P 500 index. The KBW index has also outperformed the S&P over the past year and two years, though it still trails the S&P over the past five years.
Citigroup (C), U.S. Bancorp (USB) and BB&T Corp. (BBT) were all downgraded Thursday. For U.S. Bancorp, it was the second downgrade in the past 24 hours. For Citi, it was the second in the past week. Also seeing downgrades in recent days have been Bank of America and Regions Financial (RF).
Citigroup shares were down 1.08% to $47.72 in early trading Thursday, while shares of U.S. Bancorp were lower by 0.86% to $42.68.
For the most part, analysts aren't seeing major problems with the banks, though Citigroup, which was turned down by the Federal Reserve in its request to raise its dividend and is facing a criminal inquiry tied to its Mexico unit, may be an exception.
Disappointing results from the recent stress tests by the Federal Reserve have been a common theme in the downgrades.
Bank of America (BAC) also had something of a disappointment in its stress test, leading to a downgrade from Richard Staite last week. And in lowering U.S. Bancorp to Neutral from buy on Thursday, Goldman Sachs analyst Richard Ramsden complained of poor results on the second part of the test, known as the Comprehensive Capital Analysis and Review (CCAR).
"The next move up in shares, in our view, needed to come from pushing the dividend payout ratio a full step above 30% on the CCAR exam. With only a 7% increase in the dividend announced following CCAR (to about a 30% payout ratio), several banks (like WFC and JPM) offer a more attractive dividend yield," he wrote.