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Stock Strategist Industry Reports

Moats Widen for JPMorgan and BofA

We believe the U.S. banking system is much stronger and more stable than it was a decade ago.

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After an extensive review of the competitive positioning of the big four U.S. money center banks, we have upgraded our economic moat ratings for  JPMorgan Chase (JPM) and  Bank of America (BAC) to wide and maintaining our moat ratings for  Wells Fargo (WFC) at wide and  Citigroup (C) at narrow.

We believe it is appropriate to upgrade some of the moat ratings for the largest U.S. banks. This is based on a stronger, more stable U.S. banking system as well the increasing importance of size and scale. We believe the U.S. banking system is much stronger and more stable than it was a decade ago, leaving more room for wide moats among the best-positioned banks. This is due to the higher capital levels present in the system as well as the regulatory reform that has reduced or eliminated some of the riskier banking activities at the money center banks.

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Eric Compton does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.