Banks: Increasing valuations after tax reform
Our analysis indicates that for the banks in our coverage tax reform will increase FY18 EPS by 11% on average. Also, the banks are well placed to benefit from secondary effects such as higher GDP growth. As a result of lower corporate tax rates and the adjustment of our valuation framework to a more growth-focused approach, we have increased our price targets. We upgrade MS to Overweight from Neutral and WFC to Neutral from Underweight. We retain Overweight recommendations on C, BAC, JPM, GS and FRC.Bank of America is a bank and a financial holding company. Through its subsidiaries, the company provides a range of banking, investing, asset management and other financial and risk management products and services. The company's segments include: Consumer Banking, which provides credit, banking and investment products and services; Global Wealth & Investment Management, which provides investment management, brokerage, banking and retirement products; Global Banking, which provides lending-related products and services, integrated working capital management and treasury solutions, and underwriting and advisory services; and Global Markets, which provides sales and trading services and research services.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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