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Meredith Whitney is recommending her clients buy banks stocks, and fast, CNBC reports.The analyst, known for accurately calling the subprime mortgage crisis, has been bearish on banks for some time. This summer she predicted that the Street would shed 50,000 jobs in the coming quarters. In October, she said that lawsuits would continue to plague financial institutions.
Now we have a reversal. Whitney is especially bullish on Discover, Citi, and Bank of America. She’s taking that positive stance because in March, the Federal Reserve will release the results of its CCAR stress tests. The tests, Whitney believes, will show that the banks are adequately capitalised.
That means that investors can expect higher dividends, especially in the case of Bank of America, which, she estimates, could up to quadruple its dividend.
Today, Bank of America closed at a 17-month high and is up 98% YTD.