Tags: bove | bank | stocks

Bove: Bank Stocks Will Double

By Dan Weil   |   Monday, 09 Nov 2009 12:32 PM

Superstar bank analyst Dick Bove says bank stocks will jump 100 percent by the end of next year as earnings rebound in the second half of 2010.

Indeed, he sees earnings tripling within three years.

“Getting another 100 percent out of these stocks from this level is not as big a move as one might think given where they’ve fallen from,” Bove, who works for Rochdale Securities, told Bloomberg.

“The potential is there for a really surprisingly large increase in bank earnings. That’s why people are buying bank stocks now and are ignoring the near-term losses. They’re buying them because the longer-term outlook for earnings is astoundingly positive.”

Bank stocks plunged in 2008 and early this year.

But the 79 financial services firms in the Standard & Poor’s 500 Index have soared 131 percent from the 17-year low they reached March 6, according to Bloomberg. That’s the biggest gain among the 10 industry groups.

“Banks in the United States have never had this much cash on their balance sheets,” Bove said.

“They can withstand whatever problems come their way. These banks are just not at risk at the moment.”

It’s the big banks that Bove favors, with buy recommendations on Bank of America, Goldman Sachs, JPMorgan Chase, and Citigroup.

Meredith Whitney, another ace bank analyst, doesn’t share Bove’s bullishness. She wrote in a note to clients that bank earnings will suffer from consumer deleveraging and tougher regulation.

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Superstar bank analyst Dick Bove says bank stocks will jump 100 percent by the end of next year as earnings rebound in the second half of 2010.Indeed, he sees earnings tripling within three years.“Getting another 100 percent out of these stocks from this level is not as big...
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