Financial stocks have been on a tear lately, and some stocks in the sector could break out. The S&P 500 financial stocks are up more than 16% this year and nearly 4% in the past month. The index also rose 7% in the third quarter, outperforming the S&P 500’s 0.3% gain. The industry is optimistic about expectations that the Federal Reserve will cut interest rates later this month, with many expecting the U.S. economy to avoid a potential recession. If history is any indication, lower interest rates should give banks a boost. Wells Fargo noted that banks fell an average of 6% in the week after the first rate cut in a cycle. However, from this low point, the segment has grown at an average rate of 21%. The recent outperformance of financial stocks also comes amid a tough period for the broader market. The S&P 500 and Nasdaq both fell more than 2% in September. Against this backdrop, we use the CNBC Pro Stock Screener tool to find financial stocks that are well-liked by analysts and expected to perform well going forward. Here are the screening criteria: The stock is a member of the Financials sector of the S&P 500. Analysts maintain a consensus buy rating. The average analyst price target implies at least 10% upside potential for KKR to make the list. Shares are expected to rise about 40% in 2024, and the average price target implies nearly 17% upside ahead. Redburn Atlantic gave KKR a buy rating late last month and praised the private equity giant’s efforts to diversify its business. These include the acquisition of Global Atlantic, completed earlier this year, and the company’s growing assets. KKR Year-To-Date Mountain KKR stock. “We forecast KKR’s AuM and fee-based AuM to grow at a compound annual growth rate (CAGR) of around 10% over the next five years, with broad-based growth reflecting KKR’s asset class Scale and breadth of capabilities,” said analyst Nicholas Watts. Wells Fargo also made the list. Shares of the consumer banking giant have risen more than 8% through 2024. Deutsche Bank upgraded the stock to a buy rating last week, citing attractive buy points following the pullback. WFC Year-to-date Mountain Wells Fargo Stock. “In our view, the recent weakness creates a better entry point. In the near term, given the outlook for net II and capital (July call) and the reduced regulatory risk, one might say that has been Considerable de-risking. “Prices appear higher than they were a few months ago,” analyst Matt O’Connor said in a Sept. 2 note. Elsewhere, Bank of America is also on the list. The stock has gained about 15% through 2024, and analysts polled by LSEG expect a gain of about 17% going forward. Deutsche Bank also upgraded Bank of America last week, And said the retracement caused by Berkshire Hathaway’s sale of the stock has created a buying opportunity for Bank of America shares so far this year.
