Best Bank Stocks to Buy Right Now for Long-Term Investors

Bank stocks have started to rebound a bit after a rocky start to 2026. During the past two weeks or so, bank stocks have ticked up about 2%, according to the KBW Nasdaq Bank Index, which tracks the performance of the 24 largest U.S. bank stocks. But still, the index is down about 7% year to date.

There are certainly some cheap bank stocks out there right now, but are they good values or value traps? It depends on where you look, because a weak economy is not conducive to strong growth for banks.

It may be premature to call the economy weak. The Federal Reserve Bank of Atlanta, which tracks gross domestic product (GDP), is calling for a 2% growth for the first quarter, which is pretty solid.

But there are many factors that could weigh on the economy, including rising prices, lower unemployment, and a protracted war in Iran. This week, Goldman Sachs (NYSE: GS) raised its forecast for inflation and lowered its GDP growth projection for the year to 2.1%. Still, that's pretty decent growth. However, Goldman Sachs also raised the possibility of a recession by 5 percentage points to 30%, given these risks.

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Banks thrive in strong, growing economies when consumers and businesses are borrowing money and investing. The decline for bank stocks so far this year is mainly tied to economic upheaval, rising inflation, and fears about credit quality and defaults. Further, the environment has cast doubt on the likelihood that rates will come down as quickly as expected.

While banks generally make more interest income in a higher interest rate environment, if rates are too high, it can slow growth. Lower rates tend to accelerate lending and growth, so it's a fine line that banks walk with regard to rates.

But, barring some unexpected shock that leads to a recession or economic slowdown, rates should come down and banks should be in a pretty good spot to grow in the near term and perhaps beyond.

Here are two banks stocks that should thrive.

1. Bank of America

Bank of America (NYSE: BAC), the second-largest U.S. bank behind JPMorgan Chase (NYSE: JPM), is dirt cheap right now, trading at 12 times earnings and 11 times forward earnings.

Its low valuation, combined with strong growth prospects and the likelihood of lower interest rates, makes Bank of America a great buy right now.

The bank projected 5% to 7% net interest income (NII) growth for 2026, which is higher than its main rivals. JPMorgan Chase, for example, predicts 2.6% growth in NII in 2026 to $95 billion.

Management said on the fourth-quarter earnings call that the 5% to 7% growth rate is based on two interest rate cuts in 2026, which will drive loan and deposit growth.

Wall Street analysts see significant upside for Bank of America stock. Some 79% rate the shares a "buy" with a $62 price target, which suggests 29% upside.

2. Capital One

Wall Street analysts are also bullish on Capital One Financial (NYSE: COF) stock. Capital One is a top-10 bank that focuses on credit card lending. It is one of the largest credit card issuers in the U.S. -- and that business is expanding rapidly.

Last year, Capital One closed on its acquisition of Discover. The union brings one of the largest card issuers and lenders to the Discover card network, and that is expected to create a lot of synergies for the company.

Capital One estimates the merger will result in $2.5 billion in benefits starting in 2027, stemming from cost reductions and new revenue opportunities, officials said on the third-quarter earnings call. Part of that will come from moving some of its popular credit cards to the Discover network, which will allow it to capture more of the interchange fees.

Further, analysts expect about 4% earnings growth in 2026, but in 2027, with the integration further along, they anticipate 21% earnings gain as the synergies kick in.

Capital One stock has a high price-to-earnings (P/E) ratio now mainly because of the merger and associated expenses dragging on earnings. But it is trading at just 9 times forward earnings, making it a great value.

Wall Street analysts have set a median price target of $275 per share, suggesting a 51% return during the next 12 months.

Bank of America is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs Group and JPMorgan Chase. The Motley Fool recommends Capital One Financial. The Motley Fool has a disclosure policy.