Macrae Sykes, a portfolio manager at Gabelli Funds, went on CNBC on October 14, 2026 to review this week’s big bank earnings, and he gave a verdict on four names: buy Wells Fargo, buy Morgan Stanley, treat JPMorgan as fully valued and wait on Bank of America. Trading so far today runs against him. As of 2:18 PM ET, Wells Fargo (NYSE:WFC | WFC Price Prediction) traded at $79.87, down 1.08%. Morgan Stanley (NYSE:MS) was at $179.22, down 3.98%. JPMorgan Chase (NYSE:JPM) was at $333.22, up 0.54%, and Bank of America (NYSE:BAC) was at $50.82, down 5.83%. Both of his picks are lower and the bank he calls fully valued is higher. The split reflects his value-oriented approach.
Wells Fargo Tops His List at a Discount Multiple
Sykes said: “We would highlight Wells Fargo. We think continued efficiency gains. Their management is turning around a nice propulsion in terms of the NII going forward. They’re building up their capital markets business. At 1.6 times forward TBV we think pretty good value.”
Tangible book value (TBV) is a bank’s shareholder equity minus intangible assets such as goodwill. In other words, it is the hard capital behind each share. A bank’s balance sheet is what it sells, so investors judge it by how much it earns on that capital and what multiple of TBV the market pays for it. Earnings can swing from quarter to quarter, which makes TBV a steadier metric.
Wells Fargo is down 12.88% year to date. That decline supports the discount Sykes is pointing to. For his thesis to work, management has to deliver what it guided for. That means fourth-quarter net interest income of about $13 billion and a return on tangible common equity (ROTCE) that rises from 16.3% this quarter toward the bank’s 17% to 18% target.
Morgan Stanley’s Wealth Engine Wins Him Over
In Macrae Sykes’s words, Morgan Stanley “was lights out in terms of their 27% return for the first half. They reported 22% record return on assets for their wealth management group. The securities group continues to do well and is obviously very levered to demand for capital and wealth trends.”
The bank’s third-quarter numbers back up the wealth story. In its SEC earnings release, Morgan Stanley reported record Wealth Management revenue of $9.06B, $232B in net new assets and firmwide ROTCE of 22.6%. Even so, the stock has fallen 16.4% over the past month.
JPMorgan Gets a Pass on Valuation
A “fully valued” stock is one whose good news is already reflected in the share price. Earnings yield is annual earnings per share divided by the share price, so it tells you how much profit each dollar of stock buys. Macrae Sykes pointed to a 6% earnings yield as evidence: “JPMorgan is more fully valued at this point. We got some confirmation with the diminished buybacks in the quarter. And even Jamie’s saying he wasn’t thrilled about buying it at 6% earnings yield.”
JPMorgan is up 5.39% year to date and is the only one of the four trading higher today.
Bank of America Lands in Wait-and-See Territory
Sykes held off: “Bank of America, I think, would be interesting to see how it settles out here. There were some idiosyncratic components to how they weren’t as competitive on markets business in the quarter.” Macrae Sykes also credited the bank with a net interest margin gain of 8 basis points.
Of the four, Bank of America has fallen the most over the past month, down 18.93%. Our reporting today tied the drop to a $1.2B money laundering penalty that caused an earnings miss.
Yield Curve Gives Banks a Tailwind
The gap between the 10-year and 2-year Treasury yields stood at 0.42% as of October 13, 2026, according to Federal Reserve data. Banks pay short-term rates on deposits and earn long-term rates on loans, so a wider gap increases net interest income. On air, Macrae Sykes put the current spread at 45 basis points and said it was 70 basis points at the end of last year. The spread is up 0.09 from a month ago, so the curve has steepened lately even if it is flatter than last year.
What Could Prove Sykes Right on Wells Fargo
Sykes’s framework favors improving businesses trading at reasonable multiples of tangible book value. The clearest test arrives with Wells Fargo’s next earnings report. If net interest income comes in near the guided $13 billion and ROTCE moves into the target range, his call looks right. If either falls short, today’s discount may stick around.