Especially as in recent years investor preferences for lower risk, low beta, low vol, higher yield stocks (like utilities and staples) has been well documented as strong.
One related fact is that (at least some of the banks) feel like they haven’t gotten credit for the risk reductions they have done. Given their lower leverage now, they feel like they should have higher multiples, whereas actually their relative multiples have compressed vs the market vs pre-crisis. Of course, this may be because their risk was under-estimated pre-crisis, so their relative multiple was too high.
Especially as in recent years investor preferences for lower risk, low beta, low vol, higher yield stocks (like utilities and staples) has been well documented as strong.
One related fact is that (at least some of the banks) feel like they haven’t gotten credit for the risk reductions they have done. Given their lower leverage now, they feel like they should have higher multiples, whereas actually their relative multiples have compressed vs the market vs pre-crisis. Of course, this may be because their risk was under-estimated pre-crisis, so their relative multiple was too high.