Financial shares, in general, and banking stocks in particular, are not the most interesting investments. But over the last two years they have been mostly terrible. In 2023, rising interest rates led to the collapse of several small banks. For much of 2024, a regulatory cloud known as the “Basil III Finale” loomed over the industry and weighed down many stocks that were already struggling in a tight credit environment.
But there are signs that 2025 will be a better year for banks. Although this bodes well for such a prestigious name as JPMorgan Chase & Co. New York Stock Exchange: JPMInvestors looking for value may be better off turning to regional banks for stocks that can outperform the broader market. These banks will find it difficult to effectively meet the capital requirements and liquidity standards set by Basil III. That’s why a more relaxed standard could make regional banks more attractive.
But as with investing in any sector, fundamentals matter. Here are three regional bank stocks that started rising in 2024 and look particularly attractive in 2025.
KeyCorp Likely to Move Higher as Merger Target
Keycorp today
(As of 12/27/2024 5:30 PM ET)
- 52 week range
- $12.94
▼
$20.04
- Dividend yield
- 4.77%
- P/E ratio
- 1720.00
- Target price
- $19.16
KeyCorp NEW YORK: KEY The stock has risen sharply over the past six months, erasing losses and sending the stock up 25.9% for 2024 through Dec. 13. The company recently announced regulatory approval Bank of Nova Scotia (New York Stock Exchange: BNS) – also known as Scotiabank – to create additional investment approximately 10% at KeyCorp. This comes on the heels of an initial 4.9% investment made by Scotiabank in August.
Does this make KeyCorp a merger target? This is unclear at this time. But it is certainly possible. And that may be why analysts remain bullish on KEY stock, which otherwise appears fairly valued. According to a KeyCorp analyst on MarketBeat, the consensus price target for the stock is $19.16, which represents an increase of 5.6%.
However, investors do not necessarily buy KEY shares for capital growth. Instead, they’re eyeing the company’s high-yield dividend, which currently has a yield of 4.53%.
Analysts see financial regions as big winners from easing regulations
Financial regions today
Regions Financial
(As of 12/27/2024 5:30 PM ET)
- 52 week range
- $17.42
▼
$27.96
- Dividend yield
- 4.21%
- P/E ratio
- 13.41
- Target price
- $27.61
One day in early December Financial Corporation “Regions” New York Stock Exchange: RF The company’s shares rose more than 50%, making it one of the strongest companies in the sector. Analysts like the bank’s balanced and diversified portfolio, as well as its strong presence covering much of the southern United States.
The stock is down about 5% in the week of Dec. 13, but is still up more than 28% for the year. As a result, the stock price was about $24 per share, which made Russian shares more attractive.
In its third-quarter earnings report in October, the bank said it was well capitalized to meet Basil III Endgame requirements. Anticipating that these rules could be looser, analysts are raising their price targets. The consensus target price for Russian shares as of December 13 is $27.61, which is more than 10% higher than the closing price.
Huntington Bancshares has room to grow
Huntington Bancshares today
Huntington Bankshares
(As of 12/27/2024 5:30 PM ET)
- 52 week range
- $12.02
▼
$18.44
- Dividend yield
- 3.79%
- P/E ratio
- 15.75
- Target price
- $17.56
Huntington Bankshares Inc. NASDAQ:HBAN is one of the best-performing regional bank stocks for 2024, up 34.3% as of December 13, 2024. As we know, most of this growth occurred in the last six months of the year, as optimism about looser regulation prevailed. .
However, after falling about 2.5% in the past month, HBAN shares are still trading at $17.12 per share and appear fairly valued based on projected earnings. That hasn’t stopped analysts from raising their price targets. One of the most optimistic forecasts comes from analysts at JPMorgan Chase, who reiterated their Outperform rating on the stock. The firm believes the bank’s earnings will grow 6% above forecast in 2025.
Two areas that stand out are the bank’s deposit mix, which has recently focused on commercial deposits, and its strategic focus on money market growth versus certificates of deposit (CDs).
Before you consider KeyCorp, you should hear this.
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While KeyCorp currently has a Moderate Buy rating among analysts, the top-rated analysts consider these five stocks to be Strong Buys.
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