The U.S. has the largest financial services sector in the world, generating more than $500 billion in annual revenues and employing nearly eight million people. Three of the five largest banks in the world are American, and the U.S. overwhelmingly dominates when it comes to investment banking activities. Strong buy financial services stocks stand out as top performers among these. There’s a significant buying opportunity for investors.
By every measure, the financial services sector is a huge contributor to the U.S. economy. And bank stocks are having a moment in the sun right now. After struggling through the pandemic and the high interest rate environment of the past few years, bank stocks are rising and analysts are again singing their praises.
Here are the Wall Street favorites: three strong buy financial services stocks for June 2024.
JPMorgan Chase (JPM)
The consensus view of 22 Wall Street analysts is that bank JPMorgan Chase (NYSE:JPM) is a “strong buy.” A total of 17 analysts have a “buy” rating on the stock and the others have a “hold” rating. There are no “sell” ratings on the stock. The bullish call comes as JPMorgan’s stock has gained 15% this year and risen 38% over the last 12 months. Despite the strong performance, Wall Street still sees 10% upside for JPM stock.
Analysts like JPMorgan’s position as the world’s largest bank with more than $3 trillion of assets under management. They also like the lender’s financial results. For this year’s first quarter, JPMorgan beat Wall Street forecasts on the top and bottom lines. The bank reported EPS $4.44 compared to $4.11 that was expected. Revenue totaled $42.55 billion compared to the $41.85 billion forecast on Wall Street. Sales were up 8% year-over-year.
Goldman Sachs (GS)
Not long ago, Goldman Sachs (NYSE:GS) was in trouble. Its stock was languishing after a failed foray into retail banking and there were media articles questioning the leadership of the investment bank’s CEO David Solomon. Those days seem almost like a distant memory now as GS stock has recovered and risen nearly 20% this year. The analyst community has turned much more positive on the bank and its stock.
A total of 19 analysts give Goldman Sachs’ stock a “strong buy” rating. As with JPMorgan, there are no “sell” ratings on GS stock. Analysts who, not long ago, were critical of the bank now seem encouraged by efforts to wind down the retail banking business. They also seem heartened by deals such as initial public offerings (IPOs) that are Goldman Sachs’ bread-and-butter return to Wall Street. And they like that the bank is pushing into lending to ultra-wealthy private bank clients.
Block (SQ)
This one is a little outside the conventional box. But financial technology firm Block (NYSE:SQ) is rated a “strong buy” among a total of 32 professional analysts. Those same analysts have placed a median price target on SQ stock that is 45% higher than where the share price currently trades. The bullish sentiment comes despite the fact that Block’s stock continues to languish following the pandemic. The share price today is 15% lower than where it was five years ago.
Analysts seem to have jumped on Block’s bandwagon after it reported blowout Q1 financial results. The company behind the popular Cash App reported EPS of 85 cents, which trounced the 72 cents that was estimated among analysts. Block’s profit more than quadrupled from a year earlier. Revenue also topped estimates, coming in at $5.96 billion versus $5.82 billion expected on Wall Street.
The company’s Cash App business reported that its gross profit rose 25% year-over-year during Q1, and Cash App reached 24 million monthly active users. Block remains a big investor in cryptocurrencies, noting that the $220 million the company put into Bitcoin (BTC-USD) had grown 160% to $573 million at the end of the year’s first quarter.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
