BofA Securities analyst Ebrahim H. Poonawala on Monday noted bank stocks have staged a significant rebound versus April lows, led by global systemically important banks (G-SIBs), money center, investment banks and trust banks.

It is unclear to Poonawala whether customer activity during the second half of 2025 will match the optimistic expectations from pre-tariff days, but bank stock performance in recent weeks suggests the market expects an improving operating environment for the second half of 2025 and 2026.

The analyst said large-cap banks are trading at 10-11 times 2026 P/E and 1.6-1.8 times P/TBV (versus mid-teens ROTCEs).

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His 3Rs thesis (rates, regulations and rebounding customer activity) is on firmer footing.

Poonawala noted the potential for further upside in bank stocks if the recession is avoided and customer activity picks up steam.

The analyst said dealogic data indicates a significant pick-up in investment banking (specifically ECM) activity over the last week.

Continuation of this trend should serve as a tailwind for capital markets-exposed banks, particularly Goldman Sachs Group, Inc ( GS ) and Morgan Stanley ( MS ) , at which the analyst expects to see generalist investor interest to own these stocks on rebounding M&A/IPO (same as in the November-February period), resilient trading and secular growth in wealth/private credit.

On wealth, he noted Morgan Stanley’s recent launch of “Power E*Trade Pro,” which, in addition to appealing to active traders, offers a significant opportunity to attract advisory assets to the firm.

Poonawala maintained Buy ratings on Goldman Sachs ( GS ) and Morgan Stanley ( MS ).

While CEO succession discussion on JPMorgan Chase & Co ( JPM ) has centered on a handoff from CEO Jamie Dimon to his successor, the analyst noted that any signs (at investor day or over the coming months) that Dimon would stay in his current role as CEO (not just as Executive Chair) for two to three more years would be very bullish for its Buy-rated stock. As he noted, at 69 years old, Dimon is younger than several financial CEOs (such as those at BlackRock and Blackstone) and remains actively engaged in the role.

GS, MS Price Actions: Goldman Sachs ( GS ) stock is down 0.96% at $612.94 at last check Monday. Morgan Stanley ( MS ) is down 0.92 at $130.96%.

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