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The Zacks Analyst Blog Highlights: Bank of America, JPMorgan Chase, Citigroup and Wells Fargo
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For Immediate Release
Chicago, IL – October 10, 2017 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog includeBank of America(NYSE: (BAC - Free Report) – Free Report), JPMorgan Chase (NYSE: (JPM - Free Report) – Free Report), Citigroup (NYSE: (C - Free Report) – Free Report) and Wells Fargo (NYSE: (WFC - Free Report) – Free Report).
The start of Q3 earnings season is finally upon us, and the first significant handful of S&P 500 companies will release their latest quarterly results this week. Of these, the most highly anticipated reports will be those of our big financial firms—including Bank of America (NYSE: (BAC - Free Report) – Free Report), JPMorgan Chase (NYSE: JPM– Free Report), Citigroup (NYSE: C– Free Report) and Wells Fargo (NYSE: WFC– Free Report).
Major banks account for nearly half of the finance sector’s total earnings, so tracking these major U.S. financials should give us a relatively clear picture of the strength of this quarter. And after a relatively disappointing Q2 earnings season, bank stocks could use a rebound.
Banks have already starting gaining momentum on the back of the GOP’s proposed tax cuts, and a fresh batch of solid quarterly reports should be exactly what the sector needs to finish 2017 on a high note. But what should investors expect to see from these major banks? Let’s take a closer look.
1. JPMorgan Chase
With global assets worth over $2.5 trillion, JPMorgan Chase & Co. is one of the biggest financial holding companies in the world. The bank is slated to report its latest quarterly results before the bell on October 12, and its success or failure could help set the tone as the busier part of Q3 season approaches.
JPMorgan has surpassed our consensus estimate for earnings in each of the trailing seven quarters, including an impressive 15.92% beat in the latest period. Shares are up just over 4% since this latest report. The company has supported bottom line growth through streamlining efforts and branch consolidation, and an improved rate environment should offset challenges faced by its persistent fee income growth problem.
Heading into the report, our latest consensus estimates are calling for earnings of $1.67 per share and revenues of $25.40 billion, which would reflect year-over-year growth of 5.62% and 2.93%, respectively. The stock is currently sporting a respectable Zacks Rank #3 (Hold), but its negative Earnings ESP—a metric that compares the consensus estimate with the most recent estimates in order to gauge latest analyst sentiment—reduces our ability to predict an earnings beat.
It’s also worth noting that JPM could seem slightly undervalued compared to its industry right now. For example, its P/E ratio of 14.24 bests the Major Banks industry average of 15.46, and its P/CF ratio of 11.48 is slightly ahead of the industry’s 12.33.
2. Citigroup
With an impressive earnings surprise streak under its belt and shares up more than 27% year-to-date, Citigroup is one of the hottest companies in the financial sector. This banking giant is preparing to release its most recent quarterly results before the market opens on October 12.
Citigroup has surpassed the Zacks Consensus Estimate for earnings in ten straight quarters. In its most recent report, the company posted earnings that were nearly 5% than we were expecting, and shares have gained more than 9% since that report was released. Citigroup’s investments in core business and expense management have been encouraging, and the recent expansion of its wealth management business in Australia signal the company’s intentions to keep growing.
Currently, our consensus estimates are calling for earnings of $1.30 per share and revenues of $17.73 billion. This earnings figure would represent year-over-year growth of 4.30%, while this revenue result would mark a slight slump from the year-ago quarter. Citigroup is sporting a Zacks Rank #3 (Hold) and an Earnings ESP of -0.29%, which makes surprise prediction more difficult.
Still, with its P/E ratio of 14.44 and a PEG ratio of 1.48 coming in better than the respective industry averages of 15.46 and 1.72, some investors might consider Citigroup shares to be undervalued heading into the report.
3. Wells Fargo
Embroiled in a wide-ranging fraud scandal and at a low point in terms of brand favorability, Wells Fargo will desperately want a positive reaction to its new report. The struggling bank is slated to report its latest results before the bell on October 13.
Wells Fargo has managed to beat our consensus estimate for earnings in four straight quarters, but the stock is flat on the year as investors continue to react to its phony checking account scheme.
Heading into its report, Wells Fargo is a Zacks Rank #4 (Hold). We typically avoid poorly-ranked stocks at earnings time, and the company’s lackluster growth picture will likely repel even more investors. Our current consensus estimates are calling for earnings of $1.03 per share and revenue of $22.30 billion, both of which would be basically flat year-over-year.
In the near term, the key details from Wells Fargo’s report will be management’s latest comments on the scandal and whether a satisfactory action plan has been produced.
4. Bank of America
Bank of America is one of the world’s most recognizable consumer banks, and a surprise uptick in investment banking has made it one of 2017’s most compelling stocks in the financial sector. The bank will look to continue this momentum with another solid report before the market opens on October 13.
Bank of America has surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, including a 6.98% beat in the most recent period. Since this latest report, shares have gained nearly 13%. The company’s gloomy view on trading revenues has been a concern, but increases in loan and deposit balances and streamlined overall operations have helped growth.
Currently, our current consensus estimates are calling for earnings of $0.45 per share and revenues of $22.06 billion, which would represent year-over-year growth of 10.84% and 1.97%, respectively. BAC is a Zacks Rank #3 (Hold), but its Earnings ESP of -0.66% makes surprise prediction more challenging.
Bank of America’s current cash flow growth of 11.45% has outpaced the industry average, so investors should keep an eye on any further improvements to the company’s financial picture.
For more on what to expect from the big bank’s this week, check out the latest analysis from Sheraz Mian, an acknowledged earnings expert and manager of the Zacks Equity Research department: Are Bank Stock Gains Sustainable?
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
Looking for Stocks with Skyrocketing Upside?
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Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year.See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Bank of America, JPMorgan Chase, Citigroup and Wells Fargo
For Immediate Release
Chicago, IL – October 10, 2017 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog includeBank of America(NYSE: (BAC - Free Report) – Free Report), JPMorgan Chase (NYSE: (JPM - Free Report) – Free Report), Citigroup (NYSE: (C - Free Report) – Free Report) and Wells Fargo (NYSE: (WFC - Free Report) – Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Monday’s Analyst Blog:
Bank Stock Earnings: What to Expect?
The start of Q3 earnings season is finally upon us, and the first significant handful of S&P 500 companies will release their latest quarterly results this week. Of these, the most highly anticipated reports will be those of our big financial firms—including Bank of America (NYSE: (BAC - Free Report) – Free Report), JPMorgan Chase (NYSE: JPM– Free Report), Citigroup (NYSE: C– Free Report) and Wells Fargo (NYSE: WFC– Free Report).
Major banks account for nearly half of the finance sector’s total earnings, so tracking these major U.S. financials should give us a relatively clear picture of the strength of this quarter. And after a relatively disappointing Q2 earnings season, bank stocks could use a rebound.
Banks have already starting gaining momentum on the back of the GOP’s proposed tax cuts, and a fresh batch of solid quarterly reports should be exactly what the sector needs to finish 2017 on a high note. But what should investors expect to see from these major banks? Let’s take a closer look.
1. JPMorgan Chase
With global assets worth over $2.5 trillion, JPMorgan Chase & Co. is one of the biggest financial holding companies in the world. The bank is slated to report its latest quarterly results before the bell on October 12, and its success or failure could help set the tone as the busier part of Q3 season approaches.
JPMorgan has surpassed our consensus estimate for earnings in each of the trailing seven quarters, including an impressive 15.92% beat in the latest period. Shares are up just over 4% since this latest report. The company has supported bottom line growth through streamlining efforts and branch consolidation, and an improved rate environment should offset challenges faced by its persistent fee income growth problem.
Heading into the report, our latest consensus estimates are calling for earnings of $1.67 per share and revenues of $25.40 billion, which would reflect year-over-year growth of 5.62% and 2.93%, respectively. The stock is currently sporting a respectable Zacks Rank #3 (Hold), but its negative Earnings ESP—a metric that compares the consensus estimate with the most recent estimates in order to gauge latest analyst sentiment—reduces our ability to predict an earnings beat.
It’s also worth noting that JPM could seem slightly undervalued compared to its industry right now. For example, its P/E ratio of 14.24 bests the Major Banks industry average of 15.46, and its P/CF ratio of 11.48 is slightly ahead of the industry’s 12.33.
2. Citigroup
With an impressive earnings surprise streak under its belt and shares up more than 27% year-to-date, Citigroup is one of the hottest companies in the financial sector. This banking giant is preparing to release its most recent quarterly results before the market opens on October 12.
Citigroup has surpassed the Zacks Consensus Estimate for earnings in ten straight quarters. In its most recent report, the company posted earnings that were nearly 5% than we were expecting, and shares have gained more than 9% since that report was released. Citigroup’s investments in core business and expense management have been encouraging, and the recent expansion of its wealth management business in Australia signal the company’s intentions to keep growing.
Currently, our consensus estimates are calling for earnings of $1.30 per share and revenues of $17.73 billion. This earnings figure would represent year-over-year growth of 4.30%, while this revenue result would mark a slight slump from the year-ago quarter. Citigroup is sporting a Zacks Rank #3 (Hold) and an Earnings ESP of -0.29%, which makes surprise prediction more difficult.
Still, with its P/E ratio of 14.44 and a PEG ratio of 1.48 coming in better than the respective industry averages of 15.46 and 1.72, some investors might consider Citigroup shares to be undervalued heading into the report.
3. Wells Fargo
Embroiled in a wide-ranging fraud scandal and at a low point in terms of brand favorability, Wells Fargo will desperately want a positive reaction to its new report. The struggling bank is slated to report its latest results before the bell on October 13.
Wells Fargo has managed to beat our consensus estimate for earnings in four straight quarters, but the stock is flat on the year as investors continue to react to its phony checking account scheme.
Heading into its report, Wells Fargo is a Zacks Rank #4 (Hold). We typically avoid poorly-ranked stocks at earnings time, and the company’s lackluster growth picture will likely repel even more investors. Our current consensus estimates are calling for earnings of $1.03 per share and revenue of $22.30 billion, both of which would be basically flat year-over-year.
In the near term, the key details from Wells Fargo’s report will be management’s latest comments on the scandal and whether a satisfactory action plan has been produced.
4. Bank of America
Bank of America is one of the world’s most recognizable consumer banks, and a surprise uptick in investment banking has made it one of 2017’s most compelling stocks in the financial sector. The bank will look to continue this momentum with another solid report before the market opens on October 13.
Bank of America has surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, including a 6.98% beat in the most recent period. Since this latest report, shares have gained nearly 13%. The company’s gloomy view on trading revenues has been a concern, but increases in loan and deposit balances and streamlined overall operations have helped growth.
Currently, our current consensus estimates are calling for earnings of $0.45 per share and revenues of $22.06 billion, which would represent year-over-year growth of 10.84% and 1.97%, respectively. BAC is a Zacks Rank #3 (Hold), but its Earnings ESP of -0.66% makes surprise prediction more challenging.
Bank of America’s current cash flow growth of 11.45% has outpaced the industry average, so investors should keep an eye on any further improvements to the company’s financial picture.
For more on what to expect from the big bank’s this week, check out the latest analysis from Sheraz Mian, an acknowledged earnings expert and manager of the Zacks Equity Research department: Are Bank Stock Gains Sustainable?
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year.See these high-potential stocks free >>.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.