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The bad news for the market is that J Pow is not letting off our collective necks. The Fed Chair doubled down on the FOMC’s intent to keep rates elevated for an extended period of time. Investors are afraid that he will send the economy careening towards recession. However, there is one industry that benefits greatly from higher interest rates. That is the banking industry.
Higher rates mean a better net interest margin for banks. That is the difference between what they charge you for loans and what they give you in interest on your deposits. One company benefiting from this trend is today’s Bull of the Day, Amerant Bancorp (AMTB - Free Report) . Amerant Bancorp Inc. operates as the bank holding company for Amerant Bank, N.A. that provides banking products and services to individuals and businesses in the United States and internationally.
Image Source: Zacks Investment Research
Amerant is a Zacks Rank #1 (Strong Buy) in the Banks – Southeast industry which ranks in the Top 8% of our Zacks Industry Rank. The reason for the favorable rank is that three analysts have increased their earnings estimates for the current year and next year over the last sixty days alone. Those bullish moves have pushed up our Zacks Consensus Estimates for the current year from $2.19 to $2.41 while next year’s number is up from $2.54 to $2.73.
That means the stock is trading at 10.9x earnings, about inline with the industry average of 10.5x. The growth estimates are what trump others in its industry. Next year EPS growth is slated to come in at 13.2% whi8le the industry average is just 9.7x.
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Bull of the Day: Amerant Bancorp (AMTB)
The bad news for the market is that J Pow is not letting off our collective necks. The Fed Chair doubled down on the FOMC’s intent to keep rates elevated for an extended period of time. Investors are afraid that he will send the economy careening towards recession. However, there is one industry that benefits greatly from higher interest rates. That is the banking industry.
Higher rates mean a better net interest margin for banks. That is the difference between what they charge you for loans and what they give you in interest on your deposits. One company benefiting from this trend is today’s Bull of the Day, Amerant Bancorp (AMTB - Free Report) . Amerant Bancorp Inc. operates as the bank holding company for Amerant Bank, N.A. that provides banking products and services to individuals and businesses in the United States and internationally.
Image Source: Zacks Investment Research
Amerant is a Zacks Rank #1 (Strong Buy) in the Banks – Southeast industry which ranks in the Top 8% of our Zacks Industry Rank. The reason for the favorable rank is that three analysts have increased their earnings estimates for the current year and next year over the last sixty days alone. Those bullish moves have pushed up our Zacks Consensus Estimates for the current year from $2.19 to $2.41 while next year’s number is up from $2.54 to $2.73.
That means the stock is trading at 10.9x earnings, about inline with the industry average of 10.5x. The growth estimates are what trump others in its industry. Next year EPS growth is slated to come in at 13.2% whi8le the industry average is just 9.7x.