Heard on the street: Some analysts are still bearish on bank stocks even though they may seem to be enticing
NEW YORK -- Major bank stocks are down 10% since August because of the rising interest rates that skewered the bond market last year. So are they bargains now, if rates are leveling off?</br></br>Some investors think so, but not analyst Lawrence Vitale of Bear Stearns. In fact, in an opinion that goes against accepted wisdom in some corners of Wall Street, Mr. Vitale yesterday morning sent the firm's clients a clear, startling message:</br></br>This is "Bank Hell," he declared.</br></br>Intensified competition and continued rate increases will pummel the banks throughout 1995, Mr. Vitale warned. "We believe that we are in a bear market for bank stocks, despite the continued strong industry fundamentals," he said in his commentary (which actually is a summary of a report issued just before the holidays that got little attention on Wall Street).</br></br>Even though bank stocks have declined to more-tempting levels, the Bear Stearns analyst added, "we believe there is further downside potential as earnings weakness in 1995 becomes more visible."