Wall Street Says To Buy These 4 Stocks Affected By Bank Failures

Stocks have been hammered by Silicon Valley Bank's collapse, but Wall Street analysts see buying opportunities.

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Due to the failure of Silicon Valley Bank, Signature Bank, and Silvergate Bank in the past week, there has been a broader market rout and concerns about the health of the overall financial system as a result. It does not seem to have prevented some analysts from making some bullish calls this week on battered financial stocks like Charles Schwab SCHW +12.37%  (ticker: SCHW) and on companies that held money at the collapsed Silicon Valley Bank, such as Roku (ROKU).

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On Monday, Citigroup reiterated its Buy rating on shares of Bill Holdings (BILL), a company that provides financial automation software to businesses around the world. The price target for the stock has been lowered by an analyst, Andrew Schmidt, from $131 to $108, citing the ongoing selling pressure on the stock. The company said Saturday that it has about $670 million at Silicon Valley Bank and that it has enough cash to meet its working capital and other requirements for the remainder of the year.

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As Schmidt points out, Bill represents a rare pure play on business-to-business commerce digitization, which has the potential to drive long-term growth. Additionally, Bill said that he would ultimately be able to recover all deposits, although there would be some transition costs involved. After jumping 8% on Monday, the stock price of Bill was up nearly 2% on Tuesday to $75. There was a 15% drop in the stock price on Friday.

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A similar company, Roku, has a significant amount of cash and equivalents at Silicon Valley Bank at the time of this article. At the time of this article, about 26% of its cash and equivalents were there, but Roku stated it had enough cash to cover various expenditures and capital requirements.

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Alicia Reese, an analyst with Wedbush Securities, reiterated Monday that the streaming media company should be rated Outperform by the brokerage. In a statement, she highlighted some of its new features, including updates to live TV and an exclusive in-store partnership with Best Buy with respect to some of their new higher-end Roku TVs. She wrote in a blog post that these features are "going to help insulate the service over the short-term" from the competition.

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Following a nearly 1% decline on both Monday and Friday, the stock surged 4% to $61.95 on Tuesday.

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There are also some financial stocks worth picking up that have fallen as the sector as a whole has struggled.

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Alessandro Balbo and Christopher Allen, Citi analysts, have raised their rating on Charles Schwab stock to Buy from Hold in a report published in Trade Algo on Monday. Stocks in the company have fallen 22% over the past two sessions, through Monday's close, as investors begin to consider the repercussions of the failed banks. Based on data provided by FactSet, the stock was trading at a 45% discount to its historical price-to-earnings ratio on Monday.

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From current trading levels of $57, Citi lowered its price target for Schwab stock from $83 to $75.

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The shares of Prosperity Bancshares were one of the regional bank stocks that were battered on Monday. Nevertheless, D.A. Davidson analyst Peter Winter upgraded shares of the Texas regional bank from a Hold rating to a Buy rating the same day, citing the bank's strong balance sheet as a reason for the upgrade.

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Despite falling 3% on Monday and 4.5% on Friday, the stock rose 2% on Tuesday to $63. Data showed that inflation continued to decelerate in February, boosting the S&P 500 SPX +1.12% 2% higher on Tuesday.