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Quarter-End Insights

Financial Services: Despite Recession Fears, We Find Value in Banks

The sector overall is slightly undervalued.

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The Morningstar U.S. Financial Services Index outperformed the Morningstar U.S. Markets Index quarter to date through June 25, up 6% compared with 3% (Exhibit 1). Overall, the median U.S.-based financial-services stock trades at about a 6% discount to its fair value estimate, so we assess the sector as modestly undervalued.

Financials have recently clawed their way back up - source: Morningstar Analysts

Michael Wong does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.