Bank stocks have witnessed a challenging 2023, facing significant unrealized losses, rising deposit costs, and sluggish loan growth. These pressures stemmed from the Federal Reserve’s aggressive rate hikes to combat inflation. However, the possibility of rate cuts starting next year has fostered optimism within the sector. Thus, with potential rate cuts and improving economic conditions, the banking sector offers promising opportunities for investors.
To help identify what could be the best bank stocks for your portfolio, we have leveraged the TipRanks Stock Screener tool. These stocks have received a Strong buy rating from analysts and boast an Outperform Smart Score (i.e., 8, 9, or 10) on TipRanks, which points to their potential to beat the broader market. Further, analysts’ price targets reflect an upside potential of more than 10%.
According to the screener, the following stocks have the potential to grow and are analysts’ favorites.
- Old Second Bancorp (NASDAQ:OSBC) – The stock has an average price target of $17.75, which implies a 15.64% upside potential from current levels. Also, its Smart Score of “Perfect 10” is encouraging.
- Essent Group (NYSE:ESNT) – The stock’s price forecast of $56.60 implies nearly 13% upside potential. On TipRanks, ESNT earns a Smart Score of eight.
- Bank of NT Butterfield & Son (NYSE:NTB) – The stock’s average price target of $35.25 implies a consensus upside of 14.1% and carries a Smart Score of eight.
- The Bancorp (NASDAQ:TBBK) – TBBK stock’s average price target implies a consensus upside of 25%. Moreover, it has an outperforming Smart Score of nine.
- Veritex (NASDAQ:VBTX) – The stock’s price forecast of $23.75 implies a nearly 13% upside. VBTX stock has a Smart Score of eight.
