Fed Cuts Rates, Signals Caution Ahead: 5 Bank Stocks Set to Benefit

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• The Fed signals one rate cut in 2026, bringing rates close to 3.4% by 2026-end

  80% confidence

• Citigroup expects total revenues to exceed $84 billion in 2025, with revenues projected to see a 4-5% CAGR through 2026

  80% confidence

• The central bank reduced the inflation target to 2.9% for 2025 from 3% predicted in September. For 2026, inflation will likely be 2.4%, down from the prior forecast of 2.6%

  80% confidence

• The rate is expected to remain unchanged in 2028

  80% confidence

• Management projects 2025 NII to rise 5.5% year over year

  80% confidence

• In 2026, growth in NII is expected to be in the range of 5-7%

  80% confidence

• By 2027, it plans to expand its financial center network and open more than 150 centers

  80% confidence

• The Zacks Consensus Estimate for 2025 and 2026 earnings implies year-over-year growth of 27.7% and 31.1%, respectively for Citigroup

  80% confidence

• Wells Fargo presently carries a Zacks Rank #2 (Buy)

  80% confidence

• KeyCorp currently has a Zacks Rank #2 (Buy)

  80% confidence

• The Zacks Consensus Estimate for WFC's 2025 and 2026 earnings implies year-over-year rallies of 2.2% and 5.4%, respectively

  80% confidence

• Citizens Financial currently carries a Zacks Rank of 3 (Hold)

  80% confidence

• In 2025, Citizens Financial expects NII to grow 3-5% and non-interest income to rise 8-10% year over year

  80% confidence

• Management expects NII (FTE) to be $15.6-$15.7 billion in fourth-quarter 2025, up 8% year over year

  80% confidence

• The U.S. economy is anticipated to grow at the rate of 1.7% this year and 2.3% in 2026

  80% confidence

• The Zacks Consensus Estimate for BAC's 2025 and 2026 earnings implies a year-over-year rise of 15.9% and 14.4%, respectively

  80% confidence

• The Zacks Consensus Estimate for CFG's 2025 and 2026 earnings implies year-over-year increases of 5.6% and 7.7%, respectively

  80% confidence

• Management expects 2025 NII to be roughly stable year over year

  80% confidence

• In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks

  80% confidence

• Citigroup currently carries a Zacks Rank of 3 (Hold)

  80% confidence

• The Zacks Consensus Estimate for KEY's 2025 and 2026 earnings implies year-over-year rallies of 15.8% and 6.9%, respectively

  80% confidence

• Management expects a return on average tangible common shareholders' equity of 16-18% and a NIM to be 3.25-3.50% range by 2027

  80% confidence

• For 2027, the Fed projected the terminal rate hitting 3.1%, indicating one further rate cut

  80% confidence

• Bank of America carries a Zacks Rank #2 (Buy)

  80% confidence

• In 2025, the company expects adjusted total revenues (tax equivalent or TE) to be up 15% from the prior year

  80% confidence

• The unemployment rate is seen ticking down to 4.4% next year from 4.5% this year

  80% confidence