10 of the Best Bank Stocks to Buy for 2025: Analysts See Significant Upside
As we move deeper into 2025, the banking sector remains a focal point for investors aiming to capitalize on potential economic growth and favorable regulatory environments. Experts are highlighting select bank stocks that appear undervalued and poised for substantial gains in the coming year. According to financial analytics firm CFRA, careful stock selection will be crucial amid uncertain market conditions, including geopolitical tensions and domestic economic headwinds.
Key Drivers for Bank Stocks in 2025
Several factors are shaping the outlook for banks in 2025. Solid economic growth and a regulatory climate supportive of lending and investment activities could stimulate loan growth and boost revenue streams. Additionally, a possible resurgence in mergers and acquisitions might enhance fee income for investment banks. However, concerns surrounding ongoing tariff policies and federal workforce reductions introduce potential downside risks, especially if the U.S. economy slips toward a recession.
Top Bank Stocks with Upside Potential
CFRA analysts have identified ten bank stocks with promising upside potential based on their performance metrics, strategic positioning, and industry dynamics. Below is an overview of these recommendations, including their projected upside and market perspectives.
- JPMorgan Chase & Co. (Ticker: JPM) – Projected Upside: 29.6%
As one of the world’s largest financial services institutions, JPMorgan Chase manages nearly $4 trillion in assets. Analyst Kenneth Leon notes that JPMorgan’s fortunes are closely tied to the U.S. economy, where approximately 75%-80% of its revenue derives. The bank is gaining market share across multiple business lines, particularly as more midsize companies migrate their banking needs to larger institutions. CFRA maintains a “buy” rating with a $310 price target, compared to its $239.11 closing price as of March 19. 2. Bank of America Corp. (Ticker: BAC) – Projected Upside: 25.5%
Bank of America stands as a leading commercial and investment bank, also providing wealth management services. Leon forecasts that pro-business government policies will revitalize investment banking activities in 2025. The bank ranks third globally in investment banking fee revenue. Expectations are high for the company to surpass consensus estimates on net interest income (NII) and investment banking income, critical components for organic revenue growth. CFRA assigns a “buy” rating with a $53 target, against a closing price of $42.21 on March 19. 3. Wells Fargo & Co. (Ticker: WFC) – Projected Upside: 29.1%
Wells Fargo is among the largest U.S. banks, focusing primarily on domestic lending. Analyst Alexander Yokum highlights Wells Fargo’s potential to improve returns on tangible common equity beyond the 13.4% reported in 2024. CEO Charles Scharf’s restructuring efforts are gaining traction, with notable growth in the credit card division. A key milestone expected in 2025 is the possible lifting of an asset cap restriction, which has hindered the bank’s expansion. CFRA recommends a “buy” rating and projects a $94 price target compared to its $72.76 closing price on March 19. 4. HSBC Holdings PLC (Ticker: HSBC) – Projected Upside: 17.2%
HSBC is a global banking powerhouse with a customer base exceeding 40 million. Analyst Firdaus Ibrahim points to HSBC’s substantial exposure to the Asian markets as a strategic advantage amid Asia’s anticipated long-term banking growth. As interest rates decline, HSBC’s asset management and private banking fees are expected to support revenue growth. The divestment of underperforming business segments has improved capital allocation and profitability prospects. CFRA maintains a “buy” rating with a target price of $69, against a $58.85 closing price on March 19. 5. Royal Bank of Canada (Ticker: RY) – Projected Upside: 26.1%
As Canada’s largest commercial bank and owner of U.S.-based City National Bank, Royal Bank of Canada (RBC) has a robust track record of delivering industry-leading returns on equity and weathering economic downturns. Yokum anticipates benefits from merger synergies and City National’s performance to enhance returns and earnings resilience. Furthermore, expected reductions in deposit pricing pressures and ongoing cost-cutting initiatives bode well for the bank’s 2025 outlook. CFRA holds a “buy” rating with a $144 price target, with RBC’s shares closing at $114.22 on March 19. 6. Citigroup Inc. (Ticker: C) – Projected Upside: 25.9%
Diversified global bank Citigroup continues to benefit from its focus on institutional banking growth and operational turnaround. Leon notes Citi’s leadership in technology platforms and corporate treasury services. Additionally, the planned exit from consumer banking operations in Mexico will streamline the business and reduce payroll costs. Citi’s commitment to consistency and transparency promises long-term investor value, with an expected 4.1% revenue growth in 2025. CFRA rates Citi as “buy” with a $90 price target versus a $71.44 closing price as of March 19. 7. PNC Financial Services Group Inc. (Ticker: PNC) – Projected Upside: 52.4%
PNC Financial Services is a major U.S. bank supporting asset management and traditional corporate banking services. Analyst Yokum foresees PNC elevating its net interest margin from 2.75% at the end of 2024 to nearly 3% by the close of 2025. He believes market consensus underestimates net interest income potential, setting the stage for the bank to outpace earnings forecasts. Lower funding costs, favorable asset repricing, and accelerating loan growth are significant catalysts, earning PNC a “strong buy” rating and a $265 price target relative to its $173.83 closing price.
- NatWest Group PLC (Ticker: NWG) – Projected Upside: 5.6%
Leading in the U.K. corporate and retail banking sector, NatWest focuses heavily on digital transformation, disciplined growth, and balance sheet management. Significant improvements in operational efficiency have been achieved, lowering the cost-to-income ratio from 74% in 2020 to just 53.4% in 2024. Analyst Ibrahim is optimistic about NatWest’s trajectory as it continues to optimize profitability and loan quality. CFRA assigns a “buy” rating, with a modest upside forecast.
- M&T Bank Corp. (Ticker: MTB) – Projected Upside: 46.8%
[Content on M&T Bank to be added once full details are available.]
- Fifth Third Bancorp (Ticker: FITB) – Projected Upside: 49.5%
[Content on Fifth Third Bancorp to be added once full details are available.]
Conclusion
While the banking sector faces headwinds from geopolitical uncertainty and potential economic slowdown, select institutions show impressive promise due to strategic positioning, operational improvements, and favorable market dynamics. Investors seeking exposure to the financial sector should consider these ten bank stocks, closely monitoring economic indicators and regulatory developments throughout 2025. For ongoing updates and expert financial advice, sign up for stock news with the Invested newsletter.
*Data reflects closing prices and analyst ratings as of March 19, 2025. —
Smart Money Mindset remains committed to providing timely, insightful investment content to empower your financial decisions.