This year began on an optimistic note, with expectations that the Federal Reserve will lower interest rates significantly. Many economists and market participants projected six to seven rate cuts as inflation continued to cool. However, as the year progressed, inflation struggled to reach the Fed’s target of 2%, leading to decreased bets on rate cuts. Since September, the central bank has lowered rates by 75 basis points (bps), and another 25-bps cut is likely to be announced next week. 

Bank stocks remained in the spotlight throughout the year, driven by a keen focus on the interest rate cut trajectory. Additionally, the U.S. economy continued to grow at a solid pace while the job market tightened. The operating environment improved and demand for loans witnessed a decent rise.    

Further, several banks undertook many measures to rely less on spread income to generate top-line growth. With bank stocks in the spotlight, picking a fundamentally strong company and generating returns becomes difficult. Hence, investors can bet on — Community Trust Bancorp, Inc. CTBI, East West Bancorp EWBC and QCR Holdings, Inc. QCRH — which analysts recommend.

Analysts have a detailed insight into the overall sector and industry. They place company fundamentals against the current economic backdrop to determine how a particular stock will fare as an investment. Hence, analyst recommendations can help pick suitable stocks for generating robust returns.

3 Analyst-Suggested Bank Stocks for 2025

We shortlisted the abovementioned three bank stocks with the help of the Zacks Stock Screener. These stocks have a Zacks Rank of 1 (Strong Buy) or 2 (Buy). Further, more than 70% of brokers recommend these stocks as a strong buy or buy. Our research shows such stocks provide good investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.

The chosen banks have performed well this year and have more upside left. This optimistic stance signifies bullish analyst sentiments, reflecting solid fundamentals and the expectation of outperformance.

Year-to-Date Price Performance
 

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Community Trust Bancorp, based in Pikeville, KY, provides a wide range of commercial and personal banking and trust and wealth management services. The company operates through 81 banking locations in eastern, northeastern, central and south-central Kentucky, southern West Virginia and northeastern Tennessee.

Lower interest rates, decent loan demand and efforts to bolster fee income sources will keep supporting CTBI’s financials. As the Fed keeps lowering interest rates, the cost of funding is expected to come down for the company, thus aiding net interest margin.

CTBI, with a market cap of $1.1 billion and a Zacks Rank #1, has jumped 33.8% in the year-to-date period. The company’s earnings are expected to rise 4.6% in 2024 and 7.2% in 2025. The current average price target of $60 represents an upside of 2.23%.

Currently trading at $58.69, Community Trust Bancorp has an average brokerage recommendation (ABR) of 1.33 on a scale of 1 to 5 (Strong Buy to Strong Sell). ABR is the calculated average of actual recommendations made by brokerage firms and portends the stock's future potential.

Analyst Price Targets: CTBI
 

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East West Bancorp, based in Pasadena, CA, serves as a financial bridge between the United States and China by providing various consumer as well as commercial banking services to the Asian-American community. The company operates through more than 110 locations in the United States and China. 

Decent loan demand, down-rate protection hedge programs, focus on improving fee income and relatively high rates will likely aid East West Bancorp’s revenues. Its enhanced capital distribution plan indicates a solid balance sheet and liquidity position.

While EWBC’s earnings are projected to witness a year-over-year fall of 2.1% this year, it will rebound and grow at the rate of 3.2% in 2025. The company has a market cap of $14.3 billion and currently carries a Zacks Rank of 2. 

The company’s shares have surged 44% year to date. East West Bancorp’s current average target price of $111.92 represents an upside of 8.02%. Currently trading at $103.61, it has an ABR of 1.38 on a scale of 1 to 5.

Analyst Price Targets: EWBC
 

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QCR Holdings, headquartered in Moline, IL, provides commercial and consumer banking, and trust and asset management services. The company operates through 36 locations in Iowa, Missouri, Wisconsin and Illinois.

Lower interest rates, modest loan demand and efforts to bolster fee income sources will support QCRH’s financials. Further, the company’s strong liquidity and balance sheet position are positives.

QCRH, with a market cap of $1.5 billion, has soared 51.9% in the year-to-date period. While the company’s earnings are expected to decline 1.3% in 2024, it will rebound and increase 3.5% in 2025. The current average price target of $92.60 represents an upside of 4.43%.

Currently trading at $58.69, QCR Holdings has an ABR of 1.40 on a scale of 1 to 5. The stock sports a Zacks Rank #1, at present.

Analyst Price Targets: QCRH
 

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Community Trust Bancorp, Inc. (CTBI) : Free Stock Analysis Report

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