×
Pro Analysis

Self-described 'lame' analyst: We can't find a single bank to buy because 'everything good is priced in'

A customer leaves an ATM at a Wells Fargo branch in Denver.
Rick Wilking | Reuters
A customer leaves an ATM at a Wells Fargo branch in Denver.

Susquehanna's Jack Micenko downgraded Wells Fargo, U.S. Bancorp, Regions Financial and Zions Bancorp to neutral, saying in a report Thursday that "everything good is priced in" since the Republican sweep of the elections.

The analyst, who covers regional banks, added in his note to clients:

"For the first time in over 15 years, we do not have a single positive-rated stock in our banks coverage. While admittedly lame for a 'sell- sider' to have no positive rated stocks, we simply cannot make the math work at these levels, and we'd rather be analytically honest than make aggressive or suspect assumptions to manufacture or maintain a rating. While higher rates are impacting reinvestment yields today and tax reform appears to be a front burner issue, material regulatory relief impacting earnings into the medium term strikes us as optimistic."

The KBW Bank Index is up 16 percent since the day before the election on expectations for higher interest rates and lower regulation and taxes. That gain tops the annual return in most years for this group, the analyst notes.