These bank stocks are cheap and expected to rally

These bank stocks are cheap and expected to jump, according to CNBC Pro. The banking industry is in focus ahead of the second-quarter earnings season, set to kick off Friday with reports from major institutions Citigroup, JPMorgan Chase and Wells Fargo. Results from Bank of America, Goldman Sachs and Morgan Stanley are due out next week. Regional banking stocks will also be in the spotlight. While shares of larger banks have remained resilient, smaller institutions have struggled following the collapse of Silicon Valley Bank in March 2023. The SPDR S & P Regional Banking ETF (KRE) has dropped about 7% in 2024, far behind the S & P 500, which has rallied 17%. Given this, CNBC Pro surfaced banks reporting this week and next that are looking cheap and are poised to jump. These firms are members of the KBW Nasdaq Bank Index. They have a forward price-to-earnings ratio of 10.7 or less, meaning their forward earnings are projected to be below the overall KBW. Meanwhile, the average consensus suggests these names have upside of 15% or more to their price targets. Stock data was current as of Monday’s close. Here are those names. U.S. Bancorp surfaced on the screen. The bank stock has underperformed this year, down more than 7%. It is also unloved by the Street, with just 32% of analysts covering the stock giving it a buy rating. But it is expected to surge 19% to its consensus price target, and has a forward P/E of 10.6. Additionally, shares of U.S. Bancorp on Tuesday crossed above their 200-day moving average, indicating an upward trend in the stock. First Horizon has risen this year, notching an 8% advance. The stock is expected to gain 17% from here, and looks relatively cheap with its 10.1 forward P/E. In May, Stephens initiated coverage of the bank with an overweight rating, saying it is “well positioned for the current higher for longer interest rate environment” and has been “unduly discounted.” Western Alliance shares have underperformed this year, down 6%. However, the stock is a consensus buy among analysts, and is expected to rise 23% from here. It has a forward P/E of just 8.4. East West Bancorp and State Street also made the list.