Bank Stocks Under Pressure: Experts Pass on M&T, JPM, and Wells Fargo

Banks are a vital part of the economy, but their stocks have been underperforming lately. Over the past six months, banking stocks have gained only 8.2%, compared to the S&P 500's 13.1% rise. As a result, investors are taking a cautious approach when considering these stocks.

Three banks that experts are passing on are M&T Bank (MTB), JPMorgan Chase (JPM), and Wells Fargo (WFC). These companies face challenges from credit quality concerns and potential regulatory changes. Their sensitivity to interest rate changes and economic cycles also makes them less attractive.

M&T Bank, founded in 1856, has seen unexciting sales trends over the last two years with only a 3.8% annual growth. Its net interest income growth is estimated at 3.2%, which implies demand will slow down from its five-year trend. The bank's price-to-book ratio is 1.4x forward P/B.

JPMorgan Chase, founded in 1799, has an annual sales growth of 7.8% over the last two years, but this lags behind its peers due to its large revenue base. Its net interest margin is 2.5%, which is lower than other banks, indicating that its loans are not very profitable.

Wells Fargo, founded in 1852, has faced growth challenges with a 6% annual net interest income increase over the last five years falling short of its peers. Its estimated tangible book value per share growth is only 7.9%, implying weaker profitability.