So many articles and news stories attributing the bank rally to either the expectations of regulatory reform, or the recent steepening of the yield curve. Up until today, I had not seen much press coverage that attributed the bank rally to expectations for corporate tax reform. I was curious as to what the likely impact to after tax free cash flow would be if corporate tax rates are reduced so I made a quick model.
Seems like the after tax free cash flow that will result from corporate tax reform is the primary driver of the rally.