Banks Survive the Federal Reserve Stress Tests, Increase Dividends and Buybacks

The Federal Reserve reported its annual stress tests to measure the financial health on the top 18 financial institutions in the country.  The Federal Reserve released that all of the banks passed the stress tests except for Credit Suisse and that the majority of the banks would be allowed to pay some capital out to their shareholders.  Here is what some of the major banks in the U.S. announced after the results of the test:

Goldman Sachs (Ticker Symbol: GS) raised its quarterly dividend by almost 50%  from .85 cents per share to $1.25 per share.  The company also announced that they would be adding an additional $2 billion to its share buyback program, bringing the total up to $7 billion.

(Chart above courtesy of ​www.tipranks.com​)

Based on a survey of 5 analysts offering 12-month price targets, the average price target for Goldman Sachs’ stock is $240.20. According to that number, the stock is priced at a discount relative to Wall Street’s analysts and could be considered undervalued around current levels near $208.73.

J.P. Morgan Chase (Ticker Symbol: JPM) raised its dividend to .90 cents per share from .80 cents per share, which shows a 13% increase.  The company also increased its share buyback program by nearly $9 billion bringing the total up to $29.4 billion.

(Chart above courtesy of ​www.tipranks.com​)

Based on a survey of 8 analysts offering 12-month price targets, the average price target for J.P. Morgan’s stock is $119.33. According to that number, the stock is priced at a discount relative to Wall Street’s analysts and could be considered undervalued around current levels near $113.92.

Bank of America (Ticker Symbol: BAC) increased its dividend by .03 cents to .18 cents a share.  The bank also announced an increase to its stock buyback program, raising its total amount of repurchases to $30.9 billion.

(Chart above courtesy of ​www.tipranks.com​)

Based on a survey of 10 analysts offering 12-month price targets, the average price target for Bank of America’s stock is $34.57. According to that number, the stock is priced at a discount relative to Wall Street’s analysts and could be considered undervalued around current levels near $29.51.

Wells Fargo (Ticker Symbol: WFC) increased its dividend by .06 cents to .51 cents a share.  The bank also announced an increase to its stock buyback program, raising its total amount of repurchases to $23.1 billion.

(Chart above courtesy of ​www.tipranks.com​)

Based on a survey of 11 analysts offering 12-month price targets, the average price target for Wells Fargo’s stock is $50.00. According to that number, the stock is priced at a discount relative to Wall Street’s analysts and could be considered undervalued around current levels near $47.68.

Citigroup (Ticker Symbol: C) increased its dividend by .06 cents to .51 cents a share.  The bank also announced an increase to its stock buyback program, raising its total amount of repurchases to $21.5 billion.

(Chart above courtesy of ​www.tipranks.com​)

Based on a survey of 14 analysts offering 12-month price targets, the average price target for Citigroup’s stock is $82.46. According to that number, the stock is priced at a discount relative to Wall Street’s analysts and could be considered undervalued around current levels near $71.01.

Morgan Stanley (Ticker Symbol: MS) raised its dividend to .35 cents per share from .30 cents per share, which shows a 16% increase.  The company also increased its share buyback program bringing the total up to $6 billion.

(Chart above courtesy of ​www.tipranks.com​)

Based on a survey of 14 analysts offering 12-month price targets, the average price target for Morgan Stanley’s stock is $57.33. According to that number, the stock is priced at a discount relative to Wall Street’s analysts and could be considered undervalued around current levels near $44.35.

The S&P 500 rose to an all-time high today on the news that President Trump and Chinese President Xi agreed to a trade truce and are going to hold off on placing new tariffs on each other.  As you can see from above, the banks seem to be undervalued as a whole, based Wall Street analysts’ average price targets.   The major banks are increasing dividends and share buybacks which continue to reward shareholders.  Investors in the financial space need to look to July 16th when J.P. Morgan and Bank of America report earnings for fresh news within the sector.