The financial sector has seen significant growth in recent times, with the S & P 500 financial sector advancing more than 16% this year and nearly 4% over the past month. This outperformance is especially notable as the broader market, represented by the S & P 500 and the Nasdaq Composite, have both seen declines of over 2% in September. The optimism in the financial sector is largely attributed to the expectation of a Federal Reserve rate cut later this month, which many believe will help the U.S. economy avoid a potential recession.
Using the CNBC Pro Stock Screener tool, financials stocks that are well-liked by analysts and expected to perform well in the future were identified. The criteria used for the screener included stocks that are members of the S & P 500 financial sector, maintain a consensus buy rating from analysts, and have average price targets indicating at least a 10% upside potential.
One of the stocks that stood out from the screener was KKR, which has seen a 40% increase in its share price this year. Analysts have provided an average price target suggesting a 17% upside potential for the stock. Redburn Atlantic recently initiated coverage on KKR with a buy rating, praising the company’s efforts to diversify its business through strategic acquisitions such as Global Atlantic.
Wells Fargo is another stock that made the list, with its shares gaining over 8% in 2024. Analysts surveyed by LSEG expect a 16% upside for the stock going forward. Deutsche Bank recently upgraded Wells Fargo to a buy rating, citing an attractive entry point following a pullback and de-risking in the near term.
Bank of America also featured on the list, with its shares surging approximately 15% this year. Analysts anticipate a 17% upside for the stock in the future. Deutsche Bank upgraded BofA last week, attributing the pullback in the stock to Berkshire Hathaway’s selling, creating a buying opportunity for investors.
The financial sector has shown strong performance amidst broader market declines, driven by optimism surrounding an expected rate cut by the Federal Reserve. By using tools like the CNBC Pro Stock Screener, investors can identify well-performing stocks within the financial sector that are favored by analysts. Stocks like KKR, Wells Fargo, and Bank of America have showcased potential for growth and profitability, making them attractive options for investors looking to capitalize on the current market conditions.