LPLA - Wolfe upgrades universal bank sector upgrades Bank of America in '21 outlook

Wolfe Research analyst Steven Chubak upgrades universal and trust banks to Market Outperform from Market Weight, with a strong preference for brokers vs. trusts, and downgrades retail brokers to Market Weight from Market Outperform in his 2021 outlook.Whether the bank/broker stock rally that started late in 2020 continues "will depend on what the path to normalization looks like as the economy reopens," Chubak writes.Top picks are Morgan Stanley ([[MS]] +0.6%), Goldman Sachs ([[GS]] +1.3%), and LPL Financial ([[LPLA]] -1.2%).Upgrades to Outperform: Bank of America ([[BAC]] -0.1%)as risk/reward attractive with net interest income undervalued; Raymond James Financial ([[RJF]] +0.0%), which should recoup '20 underperformance with upside to consensus; and Evercore ([[EVR]] +1.9%), which Chubak sees as the best M&A recovery play.Downgrades to Underperform: State Street ([[STT]] -1.7%) as he doesn't consider headwinds sufficiently reflected in consensus; Charles Schwab's ([[SCHW]] -1.3%) upside is limited given MBS headwinds, rich multiple; Stifel Financial ([[SF]]

For further details see:

Wolfe upgrades universal bank sector, upgrades Bank of America, in '21 outlook