As Wall Street aims to capitalize on gains in the new year, Keefe, Bruyette & Woods (KBW) identifies financial stocks, such as Citigroup and Synchrony Financial, as top picks for 2025. Despite uncertainties surrounding the Federal Reserve’s direction on interest rates, the stock market continues thriving in a bull phase, with the S&P 500 achieving a 23% gain in 2024, marking its second consecutive year of over 20% growth. After recent gains, equities are experiencing a brief pause in trading. The banking sector saw a resurgence following Donald Trump’s election, benefiting from expectations of looser regulations. Citigroup’s shares have risen over 36% in the past year, with analyst David Konrad highlighting potential catalysts, including a favorable price-to-earnings ratio and anticipated changes in regulatory capital requirements. He projects a price target of $85 per share, representing a 17% upside. Meanwhile, Synchrony Financial’s stock surged 72%, with analyst Sanjay Sakhrani forecasting an $82 target, suggesting a 21% upside, citing similar regulatory easing as a positive driver. Other recommended stocks include Hamilton Insurance Group and Charles Schwab, all rated overweight by KBW.
