We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Zacks Earnings Trends Highlights: JPMorgan and Wells Fargo
Read MoreHide Full Article
For Immediate Release
Chicago, IL – October 5, 2018 – Zacks Director of Research Sheraz Mian says, “Estimates for Q3 came down as the quarter got underway, in contrast to the positive revisions trend that we have been experiencing in the comparable periods of the last three earnings seasons.”
Q3 Earnings Season Bringing Growth Deceleration
Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Here are the key points:
The big banks will put the spotlight on the Q3 earnings season when they start reporting results on October 12th, but the reporting cycle has officially gotten underway already, with results from 19 S&P 500 members out.
It is premature to draw any conclusions from the results thus far, but they are on the weaker side relative to what we had seen from the same group of 19 index members in recent periods.
For Q3 as a whole, total earnings are expected to be up +17.9% from the same period last year on +7.3% higher revenues, the 6th time in the last 7 quarters of double-digit earnings growth.
Q3 earnings growth is expected to be in double-digit territory for 10 of the 16 Zacks sectors, with Energy, Finance, Construction, Basic Materials and Technology sectors with the strongest growth and Conglomerates and Autos expected to experience modest earnings declines.
Estimates for Q3 came down as the quarter got underway, in contrast to the positive revisions trend that we have been experiencing in the comparable periods of the last three earnings seasons. This revisions trend is in-line with the long-run historical trend (beyond the last three quarters).
For the Finance sector, total Q3 earnings are expected to be up +29.5% on +3.2% higher revenues. This would follow the sector’s +21.5% earnings growth on +7.6% higher revenues in 2018 Q2.
For the small-cap S&P 600 index, total Q3 earnings are expected to be up +20.3% from the same period last year on +7.2% higher revenues. The Finance sector, which is an even bigger earnings contributor to the small-cap index compared to the S&P 500 index, is expected to see +57% higher earnings on +6.9% higher revenues.
For full-year 2018, total earnings for the S&P 500 index are expected to be up +20.7% on +6.5% higher revenues. For full-year 2019, total earnings are expected to be up +9.8% on +5.1% higher revenues.
The implied ‘EPS’ for the index, calculated using current 2018 P/E of 18.5X and index close, as of October 2nd, is $157.72. Using the same methodology, the index ‘EPS’ works out to $173.18 for 2019 (P/E of 16.8X). The multiples for 2018 and 2019 have been calculated using the index’s total market cap and aggregate bottom-up earnings for each year.
JPMorgan (JPM - Free Report) , which kick-starts the Q3 earnings season for the Finance sector on October 12th, is expected to report +14.5% higher earnings on +8.7% higher revenues. The bank’s Q3 EPS estimates have come down modestly since the quarter got underway, with the current $2.25 per share estimate down 4 cents over the past month; not a big decline, but a decline nevertheless. Estimates for Wells Fargo (WFC - Free Report) , which reports the same day as JPMorgan, have remained stable over the same time period, likely reflecting Wells’ limited exposure to the capital market business, which has been a source of weakness for the major banks.
As with JPMorgan, Q3 estimates for a number of other Finance players came down as well since the quarter started, with the sector’s current +29.5% earnings growth down from +32.7% at the start of the quarter. The Finance sector isn’t alone in suffering estimates cuts, Q3 estimates have come down for 13 of the 16 Zacks sectors since the quarter got underway.
Please note that while the negative revisions to Q3 estimates were in contrast to the stable or positive revisions trend of the preceding three quarters, it is in-line with what we have been seeing over the last many years. Importantly, the magnitude of negative revision to Q2 estimates is modest relative to historical periods.
The growth picture remains very strong, even though it is expected to decelerate in the current and coming quarters. But more important than the growth rate is the revisions trend, which reversed course after staying broadly positive over the last three quarters.
Given the ongoing strength in the U.S. dollar, questions about the global economy and all-around trade uncertainty, it is possible that estimates for Q3 and beyond continue coming down in the coming days.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Note: Sheraz Mian manages the Zacks equity research department. He is an acknowledged earnings expert whose commentaries and analyses appear on Zacks.com and in the print and electronic media. His weekly earnings related articles include Earnings Trends and Earnings Preview. He manages the Zacks Top 10 and Focus List portfolios and writes the Weekly Market Analysis article for Zacks Premium subscribers.
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
Note: Sheraz Mian manages the Zacks equity research department. He is an acknowledged earnings expert whose commentaries and analyses appear on Zacks.com and in the print and electronic media. His weekly earnings related articles include Earnings Trends and Earnings Preview. He manages the Zacks Top 10 and Focus List portfolios and writes the Weekly Market Analysis article for Zacks Premium subscribers.
If you want an email notification each time Sheraz Mian publishes a new article, pleaseclick here>>>
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
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/performance for information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Zacks Earnings Trends Highlights: JPMorgan and Wells Fargo
For Immediate Release
Chicago, IL – October 5, 2018 – Zacks Director of Research Sheraz Mian says, “Estimates for Q3 came down as the quarter got underway, in contrast to the positive revisions trend that we have been experiencing in the comparable periods of the last three earnings seasons.”
Q3 Earnings Season Bringing Growth Deceleration
Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Here are the key points:
The big banks will put the spotlight on the Q3 earnings season when they start reporting results on October 12th, but the reporting cycle has officially gotten underway already, with results from 19 S&P 500 members out.
It is premature to draw any conclusions from the results thus far, but they are on the weaker side relative to what we had seen from the same group of 19 index members in recent periods.
For Q3 as a whole, total earnings are expected to be up +17.9% from the same period last year on +7.3% higher revenues, the 6th time in the last 7 quarters of double-digit earnings growth.
Q3 earnings growth is expected to be in double-digit territory for 10 of the 16 Zacks sectors, with Energy, Finance, Construction, Basic Materials and Technology sectors with the strongest growth and Conglomerates and Autos expected to experience modest earnings declines.
Estimates for Q3 came down as the quarter got underway, in contrast to the positive revisions trend that we have been experiencing in the comparable periods of the last three earnings seasons. This revisions trend is in-line with the long-run historical trend (beyond the last three quarters).
For the Finance sector, total Q3 earnings are expected to be up +29.5% on +3.2% higher revenues. This would follow the sector’s +21.5% earnings growth on +7.6% higher revenues in 2018 Q2.
For the small-cap S&P 600 index, total Q3 earnings are expected to be up +20.3% from the same period last year on +7.2% higher revenues. The Finance sector, which is an even bigger earnings contributor to the small-cap index compared to the S&P 500 index, is expected to see +57% higher earnings on +6.9% higher revenues.
For full-year 2018, total earnings for the S&P 500 index are expected to be up +20.7% on +6.5% higher revenues. For full-year 2019, total earnings are expected to be up +9.8% on +5.1% higher revenues.
The implied ‘EPS’ for the index, calculated using current 2018 P/E of 18.5X and index close, as of October 2nd, is $157.72. Using the same methodology, the index ‘EPS’ works out to $173.18 for 2019 (P/E of 16.8X). The multiples for 2018 and 2019 have been calculated using the index’s total market cap and aggregate bottom-up earnings for each year.
JPMorgan (JPM - Free Report) , which kick-starts the Q3 earnings season for the Finance sector on October 12th, is expected to report +14.5% higher earnings on +8.7% higher revenues. The bank’s Q3 EPS estimates have come down modestly since the quarter got underway, with the current $2.25 per share estimate down 4 cents over the past month; not a big decline, but a decline nevertheless. Estimates for Wells Fargo (WFC - Free Report) , which reports the same day as JPMorgan, have remained stable over the same time period, likely reflecting Wells’ limited exposure to the capital market business, which has been a source of weakness for the major banks.
As with JPMorgan, Q3 estimates for a number of other Finance players came down as well since the quarter started, with the sector’s current +29.5% earnings growth down from +32.7% at the start of the quarter. The Finance sector isn’t alone in suffering estimates cuts, Q3 estimates have come down for 13 of the 16 Zacks sectors since the quarter got underway.
Please note that while the negative revisions to Q3 estimates were in contrast to the stable or positive revisions trend of the preceding three quarters, it is in-line with what we have been seeing over the last many years. Importantly, the magnitude of negative revision to Q2 estimates is modest relative to historical periods.
The growth picture remains very strong, even though it is expected to decelerate in the current and coming quarters. But more important than the growth rate is the revisions trend, which reversed course after staying broadly positive over the last three quarters.
Given the ongoing strength in the U.S. dollar, questions about the global economy and all-around trade uncertainty, it is possible that estimates for Q3 and beyond continue coming down in the coming days.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Note: Sheraz Mian manages the Zacks equity research department. He is an acknowledged earnings expert whose commentaries and analyses appear on Zacks.com and in the print and electronic media. His weekly earnings related articles include Earnings Trends and Earnings Preview. He manages the Zacks Top 10 and Focus List portfolios and writes the Weekly Market Analysis article for Zacks Premium subscribers.
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
Download it free >>
Note: Sheraz Mian manages the Zacks equity research department. He is an acknowledged earnings expert whose commentaries and analyses appear on Zacks.com and in the print and electronic media. His weekly earnings related articles include Earnings Trends and Earnings Preview. He manages the Zacks Top 10 and Focus List portfolios and writes the Weekly Market Analysis article for Zacks Premium subscribers.
If you want an email notification each time Sheraz Mian publishes a new article, please click here>>>
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
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 >>
Follow us on Twitter: https://twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
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.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com/
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/performance for information about the performance numbers displayed in this press release.