10 of the Best Bank Stocks to Buy for 2026
By Wayne Duggan | Edited by Jordan Schultz | April 9, 2026
As investors look ahead to the remainder of 2026, optimism is cautiously rising regarding the outlook for bank stocks in the U.S. financial sector. Despite some risks on the horizon, such as concerns about the private credit market, analysts remain bullish on select banks that appear undervalued with significant upside potential.
Federal Reserve Asset Cap Removal Bolsters Wells Fargo
A key development reinvigorating the sector is the Federal Reserve’s removal of the asset cap on Wells Fargo in June 2025. This punitive limit, imposed since 2018, had constrained Wells Fargo’s growth strategies. With the cap lifted, Wells Fargo is positioned to pursue more aggressive expansion to regain lost market share. Analyst Alexander Yokum expressed optimism about Wells Fargo’s ability to improve its return on tangible common equity, projecting a medium-term target of 17% to 18%. CFRA rates Wells Fargo (WFC) as a "buy" with a $118 price target, while the stock was trading at $84.66 as of April 8, 2026. ### Banking Sector’s Resilient Earnings and Political Support
Bank earnings have shown resilience so far this year, supported by favorable policies from the Trump administration that encourage financial sector growth. Particularly, an expected steepening of the yield curve could improve banks’ net interest margins, boosting profitability. Additionally, investment banking is projected to rebound, offering revenue growth opportunities.
However, investors remain cautious of emerging risks in the private credit market, which could impact financial sector stability.
CFRA’s Top 10 Bank Stock Picks for 2026
CFRA, a respected equity research firm, highlighted 10 bank stocks they recommend for investors seeking growth opportunities. These selections are based on valuation, growth potential, and strategic positioning within the market. Below is a summary with analysts’ upside potential estimates and key highlights:
| Stock | Ticker | Upside Potential* | Highlights |
|---|---|---|---|
| JPMorgan Chase & Co. | JPM | 10.4% | Largest U.S. bank with $4 trillion in assets. Strong market share gains and fee income growth expected. |
| Bank of America Corp. | BAC | 25.2% | Benefits from strong consumer spending and steady economic conditions, with low credit risk. |
| HSBC Holdings PLC | HSBC | 19.6% | Global banking leader with successful cost controls and strategic transformation. Strong presence in Asia. |
| Wells Fargo & Co. | WFC | 39.3% | Post-asset-cap removal, poised for aggressive growth and improved equity returns. |
| Royal Bank of Canada | RY | 31.5% | Canada’s largest bank with U.S. exposure via City National; merger synergies and credit improvements support growth. |
| Citigroup Inc. | C | 13.3% | Streamlined operations with a focus on cross-border and institutional banking growth. |
| ICICI Bank Ltd. | IBN | 27.2% | Leading Indian bank with strong retail banking growth fueling returns above peers. |
| Canadian Imperial Bank of Commerce | CM | 33.7% | Solid Canadian bank with a strong franchise and growth potential. |
| PNC Financial Services Group Inc. | PNC | 31.3% | Well-positioned U.S. regional bank with diversified business lines. |
| ING Groep NV | ING | 23.6% | European bank with good operational momentum and strategic initiatives underway. |
*Upside potential based on April 8 close prices and CFRA analysts’ price targets.
Detailed Analysis of Key Picks
JPMorgan Chase & Co. (JPM): Kenneth Leon of CFRA notes that JPMorgan’s performance is closely tied to the broader U.S. economic outlook. JPMorgan is expected to continue leveraging its advantage in investment banking and asset management, supported by favorable administration policies that stimulate capital markets. The bank has a "buy" rating with a $340 price target versus a recent price of $307.97. Bank of America (BAC): Strong U.S. consumer spending helps credit card income, a crucial Bank of America revenue stream. The bank benefits from diversified balance sheets and no credit issues. Analyst forecasts include growing net interest income and solid underwriting and M&A activity in investment banking. Bank of America is rated as a "buy" with a $65 target and a April 8 price of $51.88. HSBC Holdings (HSBC): Firdaus Ibrahim emphasizes HSBC’s operational momentum and successful strategic overhaul, including cost discipline and capital restoration that enable share buybacks. With operations in over 60 countries and strong franchises particularly in Asia, HSBC looks positioned to achieve a 17% return on equity target. The stock carries a "buy" rating with a $108 price target, last trading at $90.27. Royal Bank of Canada (RY): Analyst Alexander Yokum points to Royal Bank’s stable returns and growth prospects enhanced by merger synergies, credit improvements, and U.S. exposure through City National Bank. The Canadian bank targets an 18% return on equity and trades at $169.47 with a $223 price target from CFRA.
Citigroup (C): Citigroup’s turnaround strategy, including divesting its Mexican consumer bank, enables a focus on core global wealth and treasury services. CFRA foresees Citi becoming the U.S. banking partner for cross-border institutional clients. The stock is rated “buy” with a $140 price target and recent price of $123.49. ICICI Bank (IBN): As one of India’s leading banks, ICICI has shown impressive retail banking growth outpacing peers. Though earnings growth may slow, its strong retail banking platform underpins sustainable performance.
Outlook for Investors
While growth prospects appear encouraging for these select banks, investors are advised to maintain vigilance given the potential risks in credit markets. Picking quality bank stocks with strong fundamentals, clear growth strategies, and diversified revenue streams will be essential to capitalizing on the growth potential in the financial sector throughout 2026. —
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