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Sunday's Featured News These 3 Banks Are Rallying Into Year-End, But Will It Continue?Written by Sam Quirke. First Published: 12/20/2025. 
Summary - Bank stocks are outperforming even as the Fed shifts to a softer monetary stance, with major names like Citi, Goldman Sachs, and Wells Fargo showing strong 2025 gains.
- Citigroup Inc. has surged nearly 60% YTD, driven by earnings beats, restructuring momentum, and a fresh J.P. Morgan upgrade.
- While Goldman Sachs Group Inc. shows strong operational results, valuation concerns are growing; Wells Fargo & Co. may offer the most upside as a potential late-cycle performer.
While artificial intelligence (AI) has dominated headlines for much of the year and has sent many tech stocks soaring, some of the strongest performances across equities have come from far less glamorous corners. Bank stocks are in the middle of a standout run, with the Financial Select Sector SPDR ETF (NYSEARCA: XLF) recently hitting an all-time high. That strength has come even as the Federal Reserve enters a softer phase—rates are no longer rising and expectations are growing that the tightening cycle is largely done, at least for now. That combination raises an uncomfortable but necessary question: if banks have already rallied strongly in a rising-rate environment, can the momentum realistically continue into 2026? To help answer that, here are three of this year's better-performing bank stocks and how each looks heading into next year. Citi Is Leaning Into Broader Momentum While President Trump's official salary is $400,000 per year... his tax returns reveal he's been collecting up to $250,000 PER MONTH from one hidden source. Until recently, most Americans couldn't touch the type of investment that makes up this investment. But thanks to Executive Order 14330, that just changed. If you love investing in disruptive new companies... Discover how to invest in the fund Trump uses to collect this income >> Citigroup Inc (NYSE: C) has been one of this year's standout stories. The stock is up nearly 60% year-to-date (YTD) and more than 14% over the past month, supported by a string of earnings beats and improving investor confidence. For now, the uptrend appears set to continue: J.P. Morgan recently upgraded the stock to Overweight. The firm highlighted Citi's ability to benefit disproportionately from a solid economic backdrop and stronger markets-related activity, viewing the bank as favorably exposed to key trends. Analysts were also encouraged by improvements in Citi's restructuring efforts, which are finally showing through in the results. J.P. Morgan's new price target of $124 implies upside of more than 10% from current levels. Even after a strong rally this year, Citi is still seen by some as having additional room to run into 2026. Goldman's Valuation Might Be Starting to Get Overheated Goldman Sachs Group Inc (NYSE: GS) has also delivered an impressive year, with shares up about 52% YTD and roughly 13% since late November. The stock began December with seven consecutive sessions of gains, underscoring strong investor sentiment. Operationally, Goldman has been hard to fault. Like Citi, it consistently beat earnings expectations throughout the year and benefited from improved capital markets activity and tighter cost discipline. That performance has rewarded shareholders, but it has also pushed valuation to more demanding levels. Goldman's P/E ratio is now at its highest point since 2018, prompting some analysts to take a more cautious tone. Both Rothschild & Co and RBC recently reiterated Neutral or equivalent ratings, suggesting the stock may be approaching fair value after its run. That doesn't imply a bearish outlook, but it does suggest the easiest gains may already be behind the stock, leaving a less attractive risk/reward profile than before. Wells Fargo Could Be The Late Bloomer of The Group Wells Fargo & Co (NYSE: WFC) has followed a bumpier path this year. The stock is up about 31% YTD and more than 10% over the past month, reaching all-time highs despite a handful of headline earnings misses earlier in the first half of the year. That resilience has drawn attention. Evercore ISI recently reiterated its Outperform rating and raised its price target to $107, implying upside of more than 15% from current levels. Compared with Citigroup and Goldman Sachs, Wells Fargo lagged considerably in 2025 while it worked through regulatory constraints and operational clean-up. But that underperformance is beginning to look like an opportunity. If those headwinds continue to ease into 2026, Wells Fargo arguably offers the most upside potential of the three bank stocks.
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