A Trio of North American Bank Majors With Attractive Forward Price-Earnings Ratios
- By Alberto Abaterusso
One strategy to unearth value opportunities is to look for stocks with an enticing forward price-earnings ratio.
Investors may be attracted by the following three stocks, as their forward price-earnings ratios are below the S&P 500 index's historical average of 15. Estimates of future earnings are based on data from Morningstar analysts.
JPMorgan Chase & Co
The first stock that makes the cut is JPMorgan Chase & Co (NYSE:JPM).
JPMorgan Chase & Co has a forward price-earnings ratio of 11.82 (versus the industry median of 10.27), which results from Friday's closing price of $103.81 per share and analyst expectations for net earnings of approximately $8.78 for the next full fiscal year.
The stock price has fallen by nearly 18% over the past year for a market capitalization of $316.43 billion and a 52-week range of $76.91 to $141.10.
GuruFocus has assigned a rating of 3 out of 10 for the company's financial strength and of 5 out of 10 for its profitability.
As of October, Wall Street sell-side analysts recommend four strong buys, nine buys, 13 holds, one underperform and one sell rating. The average price target has been established at $116.57 per share.
Bank of America Corp
The second stock that meets the criteria is Bank of America Corp (NYSE:BAC).
Bank of America has a forward price-earnings ratio of 11.83 (versus the industry median of 10.27), which is the result of Friday's closing price of $24.90 per share and analyst expectations for EPS of approximately $2.10 for the next full fiscal year.
The stock price has fallen 21.8% over the past year for a market capitalization of $215.67 billion and a 52-week range of $17.95 to $35.72.
GuruFocus has assigned a rating of 3 out of 10 for the company's financial strength and of 4 out of 10 for its profitability.
As of October, Wall Street sell-side analysts recommend six strong buys, 16 buys, seven holds and one sell rating for an average price target of $28.80 per share.
Royal Bank of Canada
The third stock that qualifies is Royal Bank of Canada (NYSE:RY).
Royal Bank of Canada has a forward price-earnings ratio of 11.29 (versus the industry median of 10.27), which derives from Friday's closing price of $73.30 per share and analysts' expectations for EPS of approximately $6.49 for the next full fiscal year.
The stock price has fallen by 9.68% over the past year for a market capitalization of $104.10 billion and a 52-week range of $49.55 to $82.74.
GuruFocus has assigned a rating of 5 out of 10 for both the company's financial strength and its profitability.
As of October, Wall Street sell-side analysts recommend three buys, one hold and one underperform rating for an average price target of $88.28 per share.
Disclosure: I have no positions in any securities mentioned.
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This article first appeared on GuruFocus.
