The lack of major outflows from many regional banks suggests that there are several stocks in the industry that could be big winners for investors, according to Wells Fargo. Analysts Jared Shaw and Timur Braziler are bullish on several names, including calling for a 60% bounce in Western Alliance earlier this week. They expanded that optimism on Thursday evening by reiterating overweight ratings on Banc of California , East West Bancorp , F.N.B. Corp . Wells Fargo is most bullish on Banc of California. The analysts have a price target of $18 per share for the stock, which is more than 50% above where it closed on Thursday. That bank could be a beneficiary of the struggles for other California banks, such as the collapse of Silicon Valley Bank and the issues for First Republic , which also suffered large outflows from depositors. “The scarcity value of BANC has improved following the events of the last 4-weeks, as the CA banking landscape has suffered meaningfully. While we see few near-term earnings catalysts, the current sub-TBV valuation provides L/T opportunity,” Braziler wrote in a note to clients. Wells Fargo called Banc of California’s deposit mix “impressive” and noted that the firm continued its stock buybacks despite the turmoil for regional banks. The upside for F.N.B. is less eye-popping at about 27%, but the bank’s cautious approach should be reassuring to investors, Wells Fargo said. “Balance sheet diversity was on full display in 1Q, as the consumer-heavy deposit base held up well. We continue to view FNB as conservatively run, which should translate to the bank outperforming in this period of economic slowdown,” Shaw wrote in a note to clients. For East West, the analysts did lower their price target to $80 per share from $85, citing slower growth prospects. But that is still more than 40% above where the stock closed on Thursday. — CNBC’s Michael Bloom contributed to this report.
Wells Fargo loves these three regional banks and thinks one will rally 50%
