Why Shares of Wells Fargo, Citigroup, and Bank of America Are Rising to Start the New Year

Shares of three of the largest U.S. banks kicked off the new year on Wall Street in good form. Wells Fargo (NYSE: WFC) and Bank of America (NYSE: BAC) closed Monday's session up by nearly 5.7% and 3.8%, respectively, after bullish calls from Wall Street. Shares of Citigroup (NYSE: C) were 4.5% higher.

Bank stocks generally edged up Monday as yields on longer-term Treasury bills are rising. That's helpful for lenders because many of their loan yields are tied to these rates. And the Federal Reserve is expected to raise its benchmark overnight loan interest rate as many as three times in 2022 (by 25 basis points each time), which will also benefit banks.

Wells Fargo outperformed the sector Monday after analysts at Barclays upgraded its stock from an equal rating to an outperform rating while increasing their price target on it to $62 a share, which implies roughly 24% upside from its current level. Barclays analyst Jason Goldberg also wrote in his research note that he expects Wells Fargo to benefit from "substantial progress on its regulatory issues, expense saving opportunities, and above-average excess capital."

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Source Fool.com