Regional bank stocks, as represented by the SPDR S&P Regional Banking ETF (NYSE:KRE), have experienced a noticeable rebound after recently hitting the 200-day moving average support.
This positive movement follows a series of strong earnings aQ1 2024 reports from sector players.
Despite this uptick, the gauge still remains nearly 20% below its pre-March 2023 crisis level, a stark reminder of last year’s turmoil in the regional banking sector.
Chart: Regional Banks Rebound Off 200-Day Support Line
Analyst Insights And Key Stock Valuation
“Regional banks with strong deposit franchises are well-positioned in a structurally higher rate environment,” said Ebrahim H. Poonawala, a noted analyst from Bank of America. This sentiment reflects a broader industry expectation that Net Interest Income (NII) could recover this year, with credit losses remaining manageable.
This forecast suggests a shifting investor attitude towards a “higher for longer” economic scenario.
Stock valuations among regional players are trading between hopes for a soft economic landing and pressures from sustained higher rates.
Notably, large-cap regional banks are trading at a price-to-earnings (P/E) ratio of 9x for 2025, compared to a 5-year pre-pandemic median of 13.1x.
This represents a 47% ...Full story available on Benzinga.com
Related tickers: KRE, MCB, HBAN.
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