10 of the Best Bank Stocks to Buy for 2025
As we look ahead into 2025, analysts are optimistic about the potential for significant gains in the banking sector. Following a robust economic forecast and a favorable regulatory environment, many believe that bank stocks present promising opportunities for investors. U.S. News recently compiled a list of the ten best bank stocks to consider purchasing, highlighting key opportunities for growth.
Economic Outlook for Banking
The banking sector is on the brink of transformation as economic growth drives expectations for increased loan generation. Analysts are eyeing a potential resurgence in mergers and acquisitions, which could further boost fee revenue for investment banks. However, the ongoing uncertainty surrounding political policies, particularly those from the Trump administration, and potential credit risks in the event of an economic downturn create a cautious backdrop for bank stock investments.
According to CFRA, here are the ten bank stocks recommended for investment based on their upside potential:
1. JPMorgan Chase & Co. (JPM)
- Upside Potential: 29.6%
- Current Price: $239.11 (as of March 19)
JPMorgan Chase is a powerhouse in the financial services industry, boasting nearly $4 trillion in assets. Analyst Kenneth Leon indicates that the bank is well-positioned to grow its market share due to a significant portion of its revenue being generated domestically. CFRA maintains a “buy” rating for JPMorgan with a price target of $310. ### 2. Bank of America Corp. (BAC)
- Upside Potential: 25.5%
- Current Price: $42.21
As one of the leading commercial and investment banks, Bank of America is anticipated to benefit from pro-business policies under the current administration. Leon forecasts that the bank will likely outperform analyst expectations concerning net interest income and investment banking revenue. CFRA has set a price target of $53 for BAC stock.
3. Wells Fargo & Co. (WFC)
- Upside Potential: 29.1%
- Current Price: $72.76
Wells Fargo has seen substantial growth within its credit card operations, and analysts believe it will continue its upward trajectory in return on equity. With expectations that restrictions imposed on the bank may be lifted in 2025 and recovery strategies gaining traction, Wells Fargo holds a buy rating from CFRA with a price target of $94. ### 4. HSBC Holdings PLC (HSBC)
- Upside Potential: 17.2%
- Current Price: $58.85
HSBC’s strong presence in Asia positions it well to take advantage of long-term banking growth in the region. Analyst Firdaus Ibrahim emphasizes that HSBC’s strategy of divesting underperforming segments has set the stage for improved profitability as interest rates stabilize. The bank holds a CFRA rating of buy with a price target of $69. ### 5. Royal Bank of Canada (RY)
- Upside Potential: 26.1%
- Current Price: $114.22
Royal Bank of Canada boasts a history of superior return on equity and demonstrates resilience during economic downturns. Analyst Yokum believes that recent mergers will yield synergistic benefits and a stronger financial position. With a buy rating from CFRA, the price target for RY is set at $144. ### 6. Citigroup Inc. (C)
- Upside Potential: 25.9%
- Current Price: $71.44
Citigroup is focusing on institutional banking growth and strategic exits from unprofitable markets. Analysts expect Citi to yield modest revenue growth while maintaining a robust operational stance. CFRA rates Citigroup as a buy, setting a price target at $90. ### 7. PNC Financial Services Group Inc. (PNC)
- Upside Potential: 52.4%
- Current Price: $173.83
PNC is projected to improve its net interest margins substantially in the coming years, benefitting from lower funding costs and accelerating loan growth. Analyst Yokum predicts earnings will surpass consensus forecasts and CFRA has rated PNC with a "strong buy" and a price target of $265. ### 8. NatWest Group PLC (NWG)
- Upside Potential: 5.6%
- Current Price: TBD
This leading U.K. bank has undergone significant operational improvements, leading to higher profitability prospects. Analyst Ibrahim cites favorable balance sheet management as key to future growth. CFRA recognizes the bank with a buy rating while emphasizing potential for improvement.
9. M&T Bank Corp. (MTB)
- Upside Potential: 46.8%
- Current Price: TBD
M&T Bank, while focused primarily on the U.S. market, has potential for significant growth, particularly due to local economic conditions favoring lending activities. Analysts highlight strong management and operational efficiency as drivers for investment.
10. Fifth Third Bancorp (FITB)
- Upside Potential: 49.5%
- Current Price: TBD
Fifth Third Bancorp presents a compelling investment case due to anticipated expansion in both retail and commercial banking, promising solid earnings growth fueled by a favorable economic environment.
Conclusion
As we advance into 2025, the landscape of banking stocks appears poised for growth amid economic rebounds and strategic shifts in business operations. Investors should weigh these top bank stocks carefully, considering both upside potential and current market volatility. Careful stock selection will be critical for investment success in the evolving banking sector.