Are banks the new black?
Recent returns indicate yes, as the sector racked up its biggest profit year-to-date since 2003, dragging the overall S&P 500 index with it.
Star analyst Meredith Whitney believes it’s no fluke, and will continue into 2013, telling CNBC on Tuesday that Bank of America (BAC) and others are poised to post double-digit gains in the year ahead.
“There’s an incredible growth opportunity within the financials, particularly Bank of America, Citigroup (C), Discover (DFS)-and there are others,” Whitney told the network. “I think the underlying support is housing is close to bottom, so that is a great headwind relief for banks … They’ve come a long way.”
She said the main catalyst would come in March when the Federal Reserve is expected to approve banks’ plans to return more capital to shareholders through dividends and stock buybacks in March.