Bank stocks have fallen to 'crazy' levels, buy these four, top analyst Mike Mayo says

Published Tue, Mar 24 20203:20 PM EDTUpdated Tue, Mar 24 20206:52 PM EDT

Kevin Stankiewicz @in/kevin-stankiewicz-b5593466 @kevin_stank

Key Points

Wells Fargo analyst Mike Mayo said there four banks in particular he recommends investors consider buying.
In general, "I am amazed at how far the bank stocks have sold off," Mayo told CNBC.

(This story is for CNBC Pro subscribers only.) Wells Fargo analyst Mike Mayo said Tuesday there is value to be had for investors in bank stocks due to the market's steep, coronavirus-driven declines. He said four banks in particular stand out as attractive opportunities. "I am amazed at how far the bank stocks have sold off," he told CNBC. "They are trading at their average level from the global financial crisis. Crazy." High-quality names Mayo said two of the highest-quality bank stocks right now are U.S. Bancorp and PNC. "If you want to play it safe, these were some of the best performers during the global financial crisis," he said. "We upgraded both for the first time in over a decade." Shares of Minneapolis-based based U.S. Bancorp are down around 47% so far this year as investors responded to the growing economic threat posed by the coronavirus. The stock closed 7.85% higher Tuesday at $31.20 per share. It notched its 52-week high of $61.11 on Dec. 16. Pittsburgh-based PNC is down 43.5% for the year, but saw its stock surge 11.83% Tuesday to $90.18 per share. PNC finished up slightly higher then the S & P 500 as Wall Street waits on Washington to pass an economic stimulus package. In a note to clients last week, Mayo said he thought PNC could "weather the storm" brought by the COVID-19 pandemic. A dash of risk Mayo said he thought investors who are looking at financials should adopt a barbell approach. To that end, he said the stocks of Citigroup and Goldman Sachs carried a little more risk than PNC and U.S. Bancorp but were still worth owning. Both banks are trading "at a fraction" of their book value, Mayo said. Mayo said Citi, which is down 49% this year, is "a lot more resilient than people expect." Shares of Citi closed up14.9% Tuesday to $40.66 each. Goldman Sachs, Mayo argued, "is one of the greatest risk managers is financial markets. The market is treating them like they really can't get things together." Goldman Sachs shares also finished up double digits on Tuesday, ending 13.8% higher at $153.60. The stock is down around 33% in 2020. Correction: An earlier version of this article misstated PNC's stock price and movement.

A customer uses a automatic teller machine (ATM) outside a US Bancorp branch in San Francisco.

David Paul Morris | Bloomberg | Getty Images

(This story is for CNBC Pro subscribers only.)

Wells Fargo analyst Mike Mayo said Tuesday there is value to be had for investors in bank stocks due to the market's steep, coronavirus-driven declines. He said four banks in particular stand out as attractive opportunities.

"I am amazed at how far the bank stocks have sold off," he told CNBC. "They are trading at their average level from the global financial crisis. Crazy."