Earlier this week we showed how a key market technician was showing concern that banks and financials are not participating in the rally. That is particularly troubling when you consider that the Dow Jones Industrial Average and S&P 500 both hit new all-time highs this week. Now we have one more bit of caution in bank stocks from the analyst Bill Carcache of Nomura.

Carcache has started coverage of U.S. Regional Banks with a Neutral rating. The good news is that some were still listed as Buys. The bad news is that this sector call is more cautious than it is optimistic.

Wednesday’s report shows that the banks would welcome higher rates and robust loan growth, but no one should hold their breath. Carcache said:

Tactically, they are overweight fee income and expense control, which they view as key drivers of bank outperformance in an environment of elevated concern about whether the economic recovery is running out of gas. By the same token, the potential for acceleration in GDP growth leads Nomura to seek exposure to banks they believe are most levered to an improving economy.

The ratings and initiations were as follows, with target prices compared to current share prices after the calls and to the Thomson Reuters consensus price targets:

Wells Fargo & Co. (NYSE: WFC) started as Buy with a $60 target. The current price is $49.43 and the consensus price target is $32.06. This matches the highest analyst price target.

M&T Bank Corp. (NYSE: MTB) started as Buy with a $146 target. The current price is $120.86 and the consensus price target is $126.65. This is $1 above the prior street-high price target.

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U.S. Bancorp (NYSE: USB) started as Buy with a $51 target. The current price is $40.37 and the consensus price target is $43.80. This represents the highest analyst price target by $1.

PNC Financial Services Group Inc. (NYSE: PNC) started as Buy with a $105 target. The current price is $84.00 and the consensus price target is $91.02. This is a street-high price target by $5.

Comerica Inc. (NYSE: CMA) started as Reduce with a $40 target. The current price is $47.12 and the consensus price target is $49.11.

SunTrust Banks Inc. (NYSE: STI) started as Neutral with a $41 target. The current price is $38.02 and the consensus price target is $42.38.

Regions Financial Corp. (NYSE: RF) started as Neutral with a $11 target. The current price is $10.17 and the consensus price target is $11.58.

Fifth Third Bancorp (NASDAQ: FITB) started as Neutral with a $23 target. The current price is $20.50 and the consensus price target is just under $24.

Huntington Bancshares Inc. (NASDAQ: HBAN) started as Neutral Rating with a $10 target. The current price is $9.22 and the consensus price target is $10.20.

KeyCorp (NYSE: KEY) started as Neutral Rating with a $14 target. The current price is $13.39 and the consensus price target is $14.92.

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