Wells Fargo & Co. (NYSE:WFC) and Fifth Third Bancorp (NASDAQ:FITB) led bank stocks higher Friday as the financial sector shook off a downward revision to fourth-quarter U.S. economic growth.
Wells Fargo and Fifth Third were the top-gaining components in the Financial Select Sector SPDR Fund (XLF), which rose more than 1% in late-morning trade.
Goldman Sachs (NYSE:GS) on Friday upgraded shares of Wells Fargo to conviction buy from neutral, while cutting its rating on Citigroup Inc. (NYSE:C) to neutral from conviction buy.
In upgrading Wells Fargo, the Goldman analysts pointed to solid core pre-provision operating profit trends, improving credit, a possible dividend increase and share buybacks, and overreaction to the recent departure of the bank’s chief financial officer.
Meanwhile, FBR Capital Markets lifted its rating on Fifth Third Bancorp to outperform from market perform and boosted its price target on the shares to $17 from $14.
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