CHARLOTTE, N.C., Jan 21 (Reuters) - The largest U.S. banks’ share valuations are low by historical standards.
All are trading at less than 1.5 times their net account value, or book value, and some are far less than that.
Historically, big bank stocks were considered cheap when they were around book value, and expensive when they were around twice book value.
Banks may look cheap, but they can stay cheap, analysts have said. Regulation could limit their avenues for making money, mortgage woes could weigh on results for some time, and low interest rates are reducing lending margins.
The price-to-book values for five of the largest U.S. banks to report earnings so far are:
Wells Fargo & Co (WFC.N) 1.44
Goldman Sachs Group Inc (GS.N) 1.28
JPMorgan Chase & Co (JPM.N) 1.04
Citigroup Inc (C.N) 0.87
Bank of America Corp (BAC.N) 0.68
Source: Company fourth-quarter earnings reports. Based on stock prices current as of mid-day January 22, 2011. (Reporting by Joe Rauch and Maria Aspan)