To The Moon

In general, rising interest rates boost banks' net interest margins, so it's good news for bank stocks. In addition, higher interest rates can boost profits on safe liabilities held by insurers.

However, banks and other financial stocks that hold long-term debt investments are in trouble against the backdrop of weaker bond markets in 2023.

In addition, investors are concerned that the Fed may not be able to pull inflation down without triggering a U.S. recession, which is bad news for growth in bank lending and for most stocks in the financial sector.

Analyst at CFRA Research still see significant upside potential in the stock prices of the following 5 financial companies.

$Visa(V)$ , $JPMorgan Chase(JPM)$ , $MasterCard(MA)$ , $Bank of America(BAC)$ , $Wells Fargo(WFC)$

1. $Visa(V)$ targets price at $263

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Against the background of the general weakening of the financial sector, $Visa(V)$ , a large global credit card company and electronic payment platform, has a total return rate of 10.4% in 2023 as of April 27, ranking first on the list.

Analyst David Holt said that Visa's diversified business model is not affected by cyclical fluctuations in consumption trends and the macroeconomic background, and said that the company has the ability to maintain continuous growth in revenue and profitability, and its huge size will achieve high capital response rate.

CFRA has a "buy" rating and a $263 price target on $Visa(V)$ 's stock, compare to the closed price at $225.6 on May 4th, is an expected 16.6% rise.

2. $JPMorgan Chase(JPM)$ targets price at $160

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JPMorgan Chase & Co (NYSE: JPM ), the world's largest bank and financial services company, has approximately $3.7 trillion in assets.

Analyst Kenneth Leon said that if there is a mild recession in the U.S. economy in 2023, JPMorgan Chase will have the opportunity to expand its wallet share, and at the same time, it may benefit from a rebound in asset and financial management businesses in 2024. The bank's return on net assets in the first quarter was 18%, which was at the top level among major US banks.

CFRA gave $JPMorgan Chase(JPM)$ a "buy" rating and a target price of $160, compare to the closed price at $134.2 on May 4th, is an expected 19.2% rise.

3. $MasterCard(MA)$ targets price at $415.

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David Holt says $MasterCard(MA)$ , a large global credit card and payments provider, is an excellent defensive investment, while its capital-light business model creates opportunities for operating leverage and above-average earnings growth. Finally, the global shift from cash and checks to digital payments will provide a long-term growth catalyst for Mastercard.

CFRA gave $MasterCard(MA)$ stock a "buy" rating and a target price of $415, compare to the closed price at $376.12 on May 4, is an expected 10.34% rise.

4. $Bank of America(BAC)$ targets price at $41

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$Bank of America(BAC)$ , a large U.S. diversified bank and financial holding company, are down 12.2% so far this year, putting them at the bottom of the list.

But analyst Leon said investors should buy the short-term interest rate-driven near 90% of the bank's lending rate sensitivity, its leading consumer and small business retail savings market share, and its market-leading wealth management position created by the Merrill Edge platform. .

CFRA gave $Bank of America(BAC)$ stock a "buy" rating and a target price of $41, compare to the closed price at $26.99 on May 4, is an expected 51.9% rise.

5. $Wells Fargo(WFC)$ targets price at $50

Leon, an analyst at CFRA Research, said that Wells Fargo & Co (NYSE: WFC), a major US bank, has a good profit growth and profitability momentum, and the improvement of operating efficiency has increased its net interest income.

In addition, the bank's business is generally stable, and its commercial loans to small and medium-sized enterprises have performed well. Finally, the end of the Fed's asset cap could also be a catalyst for the upside.

CFRA gave $Wells Fargo(WFC)$ a "buy" rating and a target price of $50, compare to the closed price at $36.72 on May 4, is an expected 36.17% rise.