Why this expert says banks are 'undervalued'

SelfRugger · 2026-02-28T02:23:35+00:00

Dory Wiley from Commerce Street Holdings argues that banks, particularly regional ones, are undervalued despite market underperformance, citing strong fundamentals like high capital ratios and credit quality. He believes their valuation will rise to 15-18 times earnings.

SelfRugger

2026-02-28 02:23:35

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Why this expert says banks are ‘undervalued’

Yahoo Finance Video and Julie Hyman

Mon, February 23, 2026 at 8:00 PM GMT+9

In this video:

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Financials (XLF) are underperforming so far this year, but many investors are still optimistic about the sector.

Commerce Street Holdings CEO Dory Wiley sits down with Market Catalysts host Julie Hyman to explain why he’s bullish on the financial sector, especially banks and regional banks.

To watch more expert insights and analysis on the latest market action, check out more Market Catalysts.

Video Transcript

00:00 Speaker A

And I know you like a lot of the regional banks too, and I’ve been really interested to see how poorly banks have done this year, or financials more broadly, including the banks.

00:07 Speaker A

Um, even though everybody comes on here and says they like them. and then but they but they you know, we have seen a lot of weakness there. There’s concerns there about AI disruption too.

00:14 Speaker A

Um, so, you know, what gives you conviction to kind of stick around in some of those names?

00:18 Speaker B

Well, maybe because I’m I we do so much focus at Commerce Street in the banking sector, but uh, I really do think they’re undervalued and very fundamental and they’re as solid as they’ve ever been with high capital ratios, good deposits, uh good margins, expanding and the best credit underwriting we’ve ever had in the history of banking.

00:33 Speaker B

Now, that doesn’t mean that there’s not weakness and this that and the other in select banks, but as a whole, they’re doing fantastic.

00:39 Speaker B

Now, when you look at fundamentally, we’re talking about banks valued at 10 times earnings on a forward PE with good growth rates, whether that be in small cap or or even midcap or or large

00:48 Speaker B

some some of the larger caps as well. So, I think there’s plenty of opportunity for, you know, those stocks to be in the 15 to 18 range, which is not acting asking too much on a forward B.

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