Bank of America starts coverage of Israel’s top banks with ‘buy’ ratings

JERUSALEM, Jan 7 (Reuters) – Bank of America on Wednesday initiated coverage of Israel’s four largest banks with “buy” ratings, saying they are well leveraged and positioned to benefit from post-Gaza war economic momentum.

Analyst David Taranto set a price target of 89.5 shekels for Hapoalim, one of Israel’s two biggest banks, implying an 18% upside to its current price. The target for rival Leumi was 85.0 shekels, a 16% upside.

Mizrahi-Tefahot was set at 265.0 shekels, while Israel Discount Bank was set at 40.3 shekels.

“Buy them all,” Taranto wrote in a report.

He said Israeli banks had languished in a no-man’s land for years after the Tel Aviv Stock Exchange was upgraded to developed status from emerging markets. They were excluded from emerging indexes but barely represented in global benchmarks.

“This disconnect kept them under the radar for many international investors,” Taranto said. “After a strong rally, we see them shifting from overlooked to favoured as fundamentals point to further gains.”

He cited strong and conservative balance sheets, excess capital, high efficiencies and attractive valuations, with banks offering generous dividend policies.

Banks should be able to weather softer inflation, lower interest rates, extra government-imposed taxes, geopolitical volatility and real estate exposure, he added.

Israel’s main banking index was up 0.7% on Wednesday. It has gained 6% so far in 2026 after rising 61% in 2025.

(Reporting by Steven ScheerEditing by Mark Potter)