2 Bank Stocks Holding Near Highs After Basel III, Jobs Data

BAC stock has added 31% year-to-date

Patrick Martin
Dec 8, 2017 at 9:39 AM
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Bank stocks are in focus today, after global bank regulators gave the sector a post-recession win in the final Basel III agreement, which found "no significant increase" of capital requirements for financial institutions was needed. Additionally, this morning's strong U.S. jobs data helps strengthen the case for a possible rate hike at next week's Fed meeting. Among the names to watch today are Bank of America Corp (NYSE:BAC) and Fifth Third Bancorp (NASDAQ:FITB), which also received bullish analyst attention this morning.

Bank of America Strong Set to End Week on a High Note

BAC received a price-target hike to $29 from $26 at Independent Research. The equity is up 0.5% to trade at $28.94. Longer term, Bank of America stock has added 31% year-to-date, and touched a nine-year high of $29.31 on Monday after the Republican tax plan cleared a key hurdle.

In the options pits, bullish betting has dominated the picture. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), BAC boasts a 10-day call/put volume ratio of 4.90, which ranks in the 87th percentile of its annual range. In other words, calls have been bought to open over puts at a faster-than-usual clip.

Fifth Third Stock Overdue for Upgrades

Fifth Third Bancorp received price-target hikes from BMO (to $32 from $29 and RBC (to $34 from $31. Although FITB stock is down 0.5% today at $30.24, its holding near Monday's 10-year high of $31.83 -- hit following a recent bounce off the rising 50-day moving average. Plus, the financial shares have tacked on more than 14% year-over-year.

Despite FITB's uptrend, analysts remain skeptical. Of the 22 brokerages covering Fifth Third stock, 20 rate the it a "hold" or "strong sell." Should the stock resume its longer-term trajectory, more analysts could be encouraged to upwardly revise their ratings -- potentially creating bigger tailwinds for the shares.


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