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Alberto Abaterusso
Alberto Abaterusso
Articles (2380) 

A Trio of North American Bank Majors With Attractive Forward Price-Earnings Ratios

They are below the S&P 500's historical average

October 25, 2020 | About:

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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About the author:

Alberto Abaterusso
I am a contributor at GuruFocus. I primarily write about how to pick potential value stocks. Gold, silver and precious metals mining industries is also my cup of tea. My articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. I hold a Master\\\'s Degree in Business Administration from Università degli Studi di Bari (Italy), Aldo Moro. I am based in The Netherlands.

You can follow me on Twitter at https://twitter.com/AAbaterusso

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