Super-regional banks could be an overlooked way for investors to get in on the rally among bank stocks, according to HSBC. Shares of the larger shops on Wall Street such as Goldman Sachs , JPMorgan Chase , Wells Fargo and Citigroup have all outperformed the S & P 500 so far in 2025, and over the past 12 months. A combination of hope for looser regulations as well expectations for a rise in deal-making during President Donald Trump's second term have been key catalysts for the sector . Shares of JPMorgan Chase have climbed more than 18% in 2025, while Goldman Sachs has advanced roughly 22%. Citigroup stock is up about 22%, while Wells Fargo has notched a 16% gain. The S & P 500 has added about 6% so far this year. Meanwhile, the super-regional banks under HSBC's coverage have all underperformed the broader market. Shares of PNC Financial Services Group have gained about 2% in 2025, while Truist Financial is up roughly 4%. U.S. Bancorp has pulled back more than 2% These smaller players have been notably absent from the boom and have been left behind unjustifiably, said HSBC analyst Saul Martinez. "Some of the things that have [been] positive cases for banks more broadly do apply to super regionals as well," Martinez told CNBC Pro. "The repricing of fixed rate assets to higher interest rates, which does provide a tailwind for net interest income. If that's the tailwind, it does benefit super regionals." Martinez's upbeat view on the smaller banks is in contrast to his more wary take on the larger ones. He downgraded Goldman Sachs, JPMorgan Chase and Bank of America earlier this week. The analyst said he expects a potential increase in loan demand to help the super-regional sector at a time when the stocks are trading below historical averages and are at a steep discount to the broader market. A broadening view Wall Street has been getting more bullish on regional and midcap banks in recent days. "A steeper yield curve, accelerating loan growth, continued fixed-rate asset repricing tailwinds, greater-than-expected NIM [net interest margin] expansion, positive operating leverage, payouts of dividends and buybacks equal to ~20% of market cap, undemanding valuations, and limited participation support our belief that the Mid-Cap Bank catch-up trade has room to run," Wolfe Research analyst Bill Carcache wrote in a Thursday note. Among specific stock names, Raymond James upgraded PNC to outperform from market perform in a Tuesday note, alongside a $220 per share price target. Analyst Daniel Tamayo's forecast implies about 11% upside from Thursday's $197.95 close. Shares have ticked up about 2% so far in 2025. PNC YTD mountain PNC Financial Services stock in 2025. The analyst expects PNC will notch record-high net interest income in both 2025 and 2026 thanks to the repricing of fixed-rate assets. This will serve as a catalyst for the stock. "In turn, we now view risk/reward positively given an improving revenue growth/profitability outlook, our projection for positive operating leverage this year and next, relatively benign credit trends, and an increasingly attractive relative valuation," he said. UBS listed Webster Financial as one of its top picks among midcap bank stocks. Analyst Nicholas Holowko cited Webster's current valuation, a forecast inflection point for credit as well as a "willingness to buy back stock" as reasons for his view. WBS YTD mountain Webster Financial stock in 2025. "Webster remains one of the more discounted names in our coverage, with answers yet to come for shorts on NYC-related credit risk and just what might happen to the Sponsor & Specialty lending vertical in light of the proliferation of private credit," the analyst said. "We still think the combination of execution, credit normalization, and capital return could help the stock re-rate higher over the course of the year." Holowko's $69 per share price target implies about 16% upside from Thursday's $59.51 close.
