Financials Are Making A Comeback – Here Are 3 To Buy Now

 

These 3 stocks are buys according to two experts. Here’s why.

Financial stocks were rallying early this week after a rough last month that saw a deep sell-off in May.

And according to one expert, the rally in the sector is just getting started. Last weekend, Oppenheimer’s head of technical analysis, Ari Wald, upgraded the financials group despite their recent weakness.

“This is a play on cyclicals in general,” Wald said to CNBC on Monday. “These oversold conditions for interest rates, this is dry powder for cyclicals. Speaking in terms of the 10-year U.S. Treasury yield, the yield is currently over 60 basis points below its 200-day moving average – extremely stretched on the downside.”

Wald pointed to the 10-year Treasury, which just recently reached its most oversold condition since January 2015, falling from 2.42% to 2.14% in the last three weeks alone. If it moves higher again, Wald says that should be good for high-beta stocks, particularly financials which typically climb when the yield curve steepens.

There are two under-the-radar stocks in the sector that Wald likes now.

“The first one is S&P Global (NYSE: SPGI). The stock has had a fresh breakout above its 2018 high pint at $215, typically the breakout point becomes support and on the upside we think that breakout measures to $260,” Wald said. That $260 price target would see the stock 16% higher from its current price.

The second stock Wald likes is American Express (NYSE: AXP).

“Here’s a stock that broke above 2018 resistance ahead of the market, now more recently getting above its May peak ahead of the market,” Wald said. “Again, a sign of relative strength, a sign of leadership. These are names we expect continue to carry the market higher.”

BK Asset Management’s managing director of FX strategy, Boris Schlossberg, agrees with Wald about what will happen when bond yields begin to climb higher again.

“I think 2.10% was a near-term bottom and as the 10-year comes back up and goes to 2.50%, it’s going to be a natural re-steepening of the yield curve and I don’t think you really need to be that picky. Everything I think is going to go up,” Schlossberg said, referring to the financials sector.

As for which in the group he has his eye on now, Schlossberg likes JPMorgan (NYSE: JPM) as it has outperformed the financial sector over the past three months.

“It’s done really, really well even in this difficult environment and I think if we get a tail wind as the yields start to widen again it’s only going to become more profitable for them,” Schlossberg said. “So I just simply like taking the JPM trade into this assumption that the 10-year yields are going to go back up. That’s going to be the key thing.”

Of the three stocks, analysts are most bullish on JPM. There are currently 10 Buy ratings on the stock and analysts’ average price target is $123.69, suggesting possible upside of 13.2% over the next twelve months.

 
Trending Ideas

Featured Stocks On The Move

Daily Rundown
  • Services, Renewable, Batteries, Midstream

    Ranger Energy Services, Inc. (RNGR) Ranger Energy Services, Inc. provides well service solutions to the oil and gas industry. The company specializes in high-spec rigs, well maintenance, and completion services,... Read More

  • Analytics, Manufacturing, Appliances, Energy

    ExlService Holdings, Inc. (EXLS) ExlService Holdings, Inc. is a leading provider of data analytics and digital operations solutions. The company helps businesses enhance decision-making, streamline operations, and achieve transformative growth... Read More

  • Wellness, Energy, Construction, Exploration

    LifeVantage Corporation (LFVN) LifeVantage Corporation is a wellness company focusing on nutrigenomics to improve health and longevity. It offers science-backed dietary supplements and skincare products aimed at optimizing health and... Read More

  • Housing, Biotech, Technology, E-commerce

    Fannie Mae (FNMA) Fannie Mae provides liquidity and stability to the U.S. housing market by purchasing mortgages from lenders, enabling them to offer more loans. The company plays a critical... Read More

  • Aviation, Medical, Biotech, Biopharmaceutical

    FTAI Aviation Ltd. (FTAI) FTAI Aviation Ltd. specializes in acquiring, leasing, and managing aviation assets, including aircraft and engines. The company provides innovative solutions to airlines and operators, optimizing performance... Read More

  • Airlines, Data, Regenerative, Diagnostics

    Frontier Group Holdings, Inc. (ULCC) Frontier Group Holdings, Inc., operating as Frontier Airlines, is an ultra-low-cost carrier focused on providing affordable air travel. Known for its fuel-efficient fleet and customer-centric... Read More

  • Electronics, Diagnostics, Construction, Analytics

    Advanced Energy Industries, Inc. (AEIS) Advanced Energy Industries, Inc. develops precision power conversion, measurement, and control solutions. Serving industries like semiconductors, telecom, and data centers, the company drives innovation in... Read More

  • Technology, Energy, Biopharmaceutical, Banking

    Aeva Technologies, Inc. (AEVA) Aeva Technologies, Inc. develops advanced sensor technology for autonomous vehicles and industrial applications. Leveraging unique LiDAR capabilities, the company delivers 4D sensing solutions to enhance safety,... Read More



Top 3 Stocks in Leading Sectors
  • 3 Consumer Stocks To Buy Now

    Playa Hotels & Resorts N.V. (PLYA) Playa Hotels & Resorts N.V. owns and operates all-inclusive beachfront resorts in prime locations across the Caribbean and Mexico. The company offers luxurious accommodations,... Read More

  • 3 Aviation Stocks To Buy Now

    Kratos Defense & Security Solutions, Inc. (KTOS) Kratos Defense & Security Solutions, Inc. specializes in developing and deploying advanced defense technologies, including unmanned systems, satellite communications, and cybersecurity solutions. The... Read More

  • 3 Apparel Stocks To Buy Now

    V.F. Corporation (VFC) V.F. Corporation is a global leader in branded lifestyle apparel, footwear, and accessories. With a diverse portfolio of iconic brands like Vans, The North Face, and Timberland,... Read More

  • 3 Defense Stocks To Buy Now

    FTAI Aviation Ltd. (FTAI) FTAI Aviation Ltd. focuses on acquiring, leasing, and managing aviation-related assets, such as aircraft and engines. The company provides tailored solutions to airlines and operators, ensuring... Read More

  • 3 Energy Stocks To Buy Now

    Antero Resources Corporation (AR) Antero Resources Corporation is a leading natural gas and liquids exploration and production company. Operating primarily in the Appalachian Basin, the company focuses on responsible energy... Read More

  • 3 Healthtech Stocks To Buy Now

    AVITA Medical, Inc. (RCEL) AVITA Medical, Inc. is a regenerative medicine company focused on innovative skin restoration solutions. Its patented RECELL System supports the treatment of burns and skin injuries,... Read More

  • 3 Technology Stocks To Buy Now

    Innodata Inc. (INOD) Innodata Inc. is a data engineering company specializing in digital transformation solutions. The company provides AI-driven data annotation, content services, and digital consulting to empower businesses in... Read More

  • 3 Finance Stocks To Buy Now

    FS KKR Capital Corp. (FSK) FS KKR Capital Corp. is a business development company providing customized credit solutions to middle-market businesses. Through its diversified investment portfolio, the company supports growth... Read More