Large-Cap Leader Regions Financial Takes Next Step Into Buy Zone

Having already earned a spot on the IBD Big Cap 20, S&P 500 banking stock Regions Financial (RF) is now opening the vault for a new breakout. As banking stocks show strength, Regions Financial joins a slew of financial sector stocks on this stock screen of the best large caps.


The IBD Big Cap 20 also features SVB Financial (SIVB), Goldman Sachs (GS), Blackstone (BX), Ally Financial (ALLY), T. Rowe Price (TROW), Morgan Stanley (MS) and Charles Schwab (SCHW).

Regions Financial also joins Wells Fargo (WFC) on the Leaderboard list of top growth stocks.

Regions Financial Expands Next Steps Toward Financial Literacy

Serving customers across the South, Midwest and Texas, the Alabama-based company is one of the nation’s largest full-service providers of consumer and commercial banking, wealth management and mortgage products and services.

With a 98 Composite Rating, RF stock ranks No. 2 within the superregional banking stocks industry group. SVB Financial earns top billing within the group, which ranks No. 25 among the 197 industry groups IBD tracks.

By comparison, fellow IBD Big Cap 20 members Goldman Sachs and Morgan Stanley hail from the No. 36-ranked money center banks industry group.

In celebration of Financial Literacy Month in April, Regions Financial announced a series of free financial wellness webinars through Regions Next Step, the bank’s financial education program.

“Following the financial uncertainty many people have experienced over the last year, smart money-management habits are more important than ever,” said Joye Hehn, Next Step financial education manager for Regions Bank.

Regions Financial has established its own track record of financial literacy, posting 320% earnings growth last quarter and a 20.1% annual pretax profit margin last year.

Analysts expect Regions Financial to post 322% EPS growth in the current quarter and a 105% increase for 2021.

RF Stock Tests Breakout, Joining Banking Stocks GS Stock, MS Stock

After clearing a 22.71 buy point in early May, Regions Financial slipped back below that entry. But it did not decline enough to flash a sell rule. With its relative strength line on the rise, RF stock quickly recaptured the original entry and is now back in buy zone.

On Monday, Regions Financial came off its lows to end the session up just under 1% and still in a buy zone. Volume was below average.

Banking stocks Goldman Sachs and Morgan Stanley are showing similar action.

After dipping below the 356.95 buy point it cleared earlier in month, Goldman Sachs has bounced back into buy zone as its RS line again nears a new 52-week high. GS stock also come off its lows Monday, edging fractionally higher.

Like other banking stocks, Morgan Stanley temporarily retreated when the stock market indexes came under pressure earlier in May. But like Regions Financial and Goldman, Again testing its original buy zone, MS stock managed to gain just under 1% in volume that was below average but rising slightly.

Such resilience comes as many banking stocks, such as Regions Financial, Goldman Sachs and Ally Financial in particular, continue to post strong earnings growth and solid forecasts for 2021.

Follow Matthew Galgani on Twitter at @IBD_MGalgani.


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