![]() The least undervalued stock was Bank of America, trading at 17% below its fair value estimate of $76. The most undervalued stock was Comerica, which as of July 6 was trading at a 43% discount to its fair value estimate. These were the most undervalued 4- and 5-star stocks from our screen: In all, eight banks were undervalued and carried a moat rating or wide or narrow as of July 6. The combination of economic moats and attractive valuations has historically led to strong performance. To whittle the list down further, we screened for companies that Morningstar stock analysts believe have economic moats, meaning they show durable competitive advantages. Of the 66 stocks in the index, 16 are covered by Morningstar analysts. We screened the Morningstar US Banks Index for the most undervalued stocks, then narrowed that search to stocks that currently carry a Morningstar Rating of 4 or 5 stars. ![]() For the last 12 months as of July 6, banks are down 4.1% while the overall market is up 17.5%. As a result, the Morningstar US Banks Index is down 10.3% so far this year, while the Morningstar US Market Index is up 15.4%. ![]() That changed in March, when the regional banking crisis hit and investors worried about the sector’s exposure to potential losses from rising interest rates. ![]() Bank of America, Wells Fargo, and JPMorgan Chase JPM are among the largest firms in the index.įor much of the 2022 bear market, financial stocks acted as a relatively safe haven. The index consists of 66 companies from the financial services industry. Bancorp USB, Bank of America BAC, and Wells Fargo WFC.ĭuring the fourth quarter of 2022 and the first quarter of 2023, the Morningstar US Banks Index kept up with the market, outpacing it for the majority of that time period. However, this year’s selloff has left many high-quality bank stocks trading in undervalued territory.Īmong the prominent bank stocks changing hands at discounted prices are U.S. As the second-quarter earnings season kicks off with the nation’s biggest banks reporting results, the worst fears of the banking crisis have eased. ![]()
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