Goldman Sachs (GS), Bank of America (BAC), Citigroup (C), and JPMorgan Chase (JPM) all have something in common that isn’t their dominance of the financial sector. These banks face pressure from anti-diversity, equity, and inclusion (DEI) activists, as cultural shifts leave them pressed against the wall.
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Conservative activists including the National Center for Public Policy Research, the National Legal and Policy Center, and the Heritage Foundation have called for the banks to weaken or remove their DEI policies. These activists own small stakes in the banks to help their efforts. While it doesn’t guarantee a victory, it does bring the cause to the attention of shareholders, potentially garnering extra support.
Similar calls to end DEI policies have previously been introduced but failed to gain traction with other investors. That could mean banks will ignore these latest requests, like Goldman Sachs intends to do, but the cultural landscape is different this time around.
How Anti-DEI Activists Might Succeed in Changing Bank Policies
First, these latest pushes against DEI follow President Donald Trump’s inauguration earlier this week. Trump now leads a Federal government that favors conservative ideals with Republicans controlling the House of Representatives and the Senate. Additionally, the Supreme Court is largely right-leaning with six of the nine justices holding conservative values.
This opens the way for anti-DEI organizations to receive the Federal government’s support in ending possible discriminatory policies. That started even before Trump was sworn in when the Supreme Court ruled against colleges admitting students based on Affirmative Action and the Securities and Exchange Commission lost a lawsuit to protect Nasdaq’s DEI requirements for publicly listed companies.
President Trump also signed an executive order against DEI shortly after taking the White House. It states “Illegal DEI and DEIA policies not only violate the text and spirit of our longstanding Federal civil-rights laws, they also undermine our national unity, as they deny, discredit, and undermine the traditional American values of hard work, excellence, and individual achievement in favor of an unlawful, corrosive, and pernicious identity-based spoils system.”
What This Means for Bank Stocks
Turning to Wall Street, analysts remain bullish on bank stocks despite pressure to end DEI policies. Goldman Sachs and Bank of America secured Strong Buy ratings while Citigroup and JPMorgan Chase have Moderate Buy ratings. Bank of America has the most growth potential over the next year with a $52.79 price target representing a possible 15.29% upside for BAC shares.
