Wells Fargo, US Bancorp, PNC Upgraded At Deutsche Bank Following Recent Share Weakness

Shares of Wells Fargo & Co. , U.S. Bancorp and PNC Financial Services rallied in afternoon trade Tuesday, after all were upgraded to buy from hold at Deutsche Bank, which said the recent pullback in their stocks and the banking sector have made the higher-quality large regional banks more attractive. Banks stocks have underperformed the broader market since the sector's highs seen on July 22, on concerns that global economic growth is slowing and "mixed emotions" about an increasing likelihood that the Federal Reserve will raise interest rates, said Analyst Matt O'Connor. He said while higher rates are good for bank net interest margins, they can also be a potential negative for market liquidity and for how stocks are valued over time. However, O'Connor wrote in a note to clients that he believes, higher-quality banks "may be better positioned for rising rates than [are] perceived given large sticky core deposit bases, in our view." Shares of Wells Fargo climbed 2.4% in afternoon trade, U.S. Bancorp rose 1.3% and PNC Financial surged 2.9%. Since July 22 through Friday, those three stocks had tumbled 12%, while the S&P 500 has lost 9.1%.