6 Top Stocks to Buy in the Banking Sector

Is it the Right Time to Invest in Banking Stocks?

The recent turmoil in the banking sector has led some investors to question whether this is the best time to buy banking stocks.
One investor argues that banking stocks still offer opportunities, but it’s time to be selective.

Banking stocks are expected to grow rapidly, but it’s important to consider the valuations and financial soundness of the institutions.

Six Banking Stocks to Watch

1. U.S.
   Bancorp (USB)

   U.S.
   Bancorp has emerged as an opportunity.
   The banking stock has underperformed this year, with a decline of over 7%.
   It’s also underappreciated by the financial community, with only 32% of analysts covering the stock giving it a buy rating.
   However, a 19% increase is forecasted compared to its consensus price target, with a forward P/E ratio of 10.6.

2. Capital One Financial Corp (COF)

   Capital One Financial Corp stands out with a forward P/E ratio of 10.3 and a potential growth of 15.4% compared to consensus targets.
   Its relatively low valuation and solid growth prospects make it interesting for investors.

3. First Horizon Corporation (FHN)

   First Horizon has seen an 8% increase this year, with a further 17% gain forecasted.
   It appears relatively cheap with a forward P/E ratio of 10.1.
   In May, Stephens initiated coverage of the bank with an overweight rating, stating it is “well-positioned for the current environment of higher interest rates for a longer period” and is “unduly discounted.”

4. State Street Corporation (STT)

   State Street Corporation has a forward P/E ratio of 9.3 and a growth potential of 16.5%.
   Despite only 31.6% of analysts covering the stock with a buy rating, its growth prospects and valuation make it an interesting option.

5. East West Bancorp, Inc.
   (EWBC)

   East West Bancorp is among the most promising banks.
   With a growth potential of 23.3% and a forward P/E ratio of 8.8, it’s one of the banking stocks to closely monitor.

6. Western Alliance Bancorp (WAL)

   Western Alliance’s stocks have underperformed this year, dropping by 6%.
   However, the stock is a consensus buy among analysts, with a forecasted increase of 23.5% from here.
   It has a low forward P/E ratio of just 8.4.

With relatively low valuations and significant growth potential, these stocks are worth keeping an eye on for those looking to diversify their portfolio with promising banking stocks.

For further insights, you may want to check out CNBC.