The near-term outlook for bank fundamentals is positive, but we see most of the firms we cover as fairly or overvalued.
We think this trust bank can expand margins over time, but shares look overvalued today.
While we expect fee growth to moderate over the longer term, the wide-moat firm should hit a return on equity just over 16% longer term, post tax reform.
The narrow-moat REIT has been funding its payout with debt and will need to execute on its acquisition ambitions to support its dividend.
Wells Fargo is still the standout in the sector.
Key themes from the Barclays Global Financial Services Conference include continued efforts to improve operating efficiency and increasing capital returns to shareholders.
CIBC is the most exposed bank to the lofty Canadian housing market, but we think there is enough margin of safety in its shares today to compensate for the risks.
Net interest margins should expand across the board as the U.S. regional banks recover from the historically low interest rates that have pressured profits for the past several years.
U.S. Bancorp is well positioned should a tax cut be implemented, but the rally in bank shares means it doesn't look like a bargain today.
Plus, Yacktman, Lynch, and Harriman share the importance of position sizing and insight on current holdings.