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JPMorgan, Wells Fargo, Citigroup and Delta Air Lines are part of Zacks Earnings Preview
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For Immediate Release
Chicago, IL – January 11, 2021 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes JPMorgan Chase & Co. (JPM - Free Report) , Wells Fargo & Company (WFC - Free Report) , Citigroup Inc. (C - Free Report) and Delta Air Lines, Inc. (DAL - Free Report) .
Big Bank Q4 Earnings Preview
The large money-center banks that will kick-off the Q4 2020 earnings season for the sector this week have suffered a significant hit to profitability as a result of the pandemic. The Q3 earnings season three months back showed business conditions starting to stabilize, with revenue weakness resulting from soft demand conditions partly offset by decelerating loan-loss provisions and effective cost controls.
Business conditions likely weakened in Q4 in response to the surging infection rates, a development that has been showing up in high-frequency economic data as well. Friday’s negative labor market reading is just the latest on that front.
While business conditions remained difficult in 2020 Q4 and are likely to remain so in the first quarter of 2021 as well, the market has learned to look past this painful period to when the ongoing vaccination exercise will reach a critical mass and put the country on the recovery path. Importantly, the market has started discounting a far more expansive fiscal policy regime from the incoming administration following the Georgia runoffs.
Bank stocks have been big beneficiaries of upgraded market sentiment, with these stocks reversing their earlier underperformance to emerge as market leaders.
The market is looking for a notable improvement in bank business conditions in 2021, particularly in the second half of the year. This has started showing in earnings estimates already, with JPMorgan’s current 2021 EPS estimate of $9.43 up from $8.51 three months back. The same for Citi has increased from $5.62 three months back to $6.19 today. Even Wells Fargo, which has been dealing with a number of company-specific issues and will be reporting results the same day as JPMorgan and Citigroup, is enjoying positive estimate revisions.
As such, the overall set up for bank earnings remains positive, with the market likely looking past Q4 results. For the Zacks Major Banks industry, which includes these major banks and account for roughly 45% of the Finance sector’s earnings, Q4 earnings are expected to decline -23.5% on -4.1% lower revenues. This would follow -17.8% earnings decline on -4.3% lower revenues.
For the Finance sector as a whole, total Q4 earnings are expected to decline -6.2% on -2.5% lower revenues.
Growth is expected to resume this year, with full-year 2021 earnings for the S&P 500 index currently expected to be up +22.7% relative to 2020 estimates. Estimates for 2021 have been steadily going up over the last six months. But we strongly feel that there is significant room for further positive revisions as the overall macro backdrop stabilizes and gets clearer, particularly in the second half of the year.
Q4 Earnings Season Gets Underway
The Q4 reporting cycle will (unofficially) get underway this week. But from our perspective, the Q4 earnings season has gotten underway already, with results from 18 S&P 500 out at this stage. These 18 index members reported results for their fiscal quarters ending in November, which we count as part of the official December-quarter tally.
We have roughly 30 companies on deck to report results this week, including 8 S&P 500 members. This week’s reporters include the aforementioned big banks and a few other major players like Delta Airlines.
For the 18 index members that have reported already, total Q4 earnings or aggregate net income is up +19% from the same period last year on +9.4% higher revenues, with 100% of the companies beating EPS estimates and 83.3% beating revenue estimates.
For an in-depth look at the overall earnings picture and expectations for the coming quarters, please check out our weekly Earnings Trends report >>>> An Improving Earnings Outlook to Start 2021
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
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.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer.
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.
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JPMorgan, Wells Fargo, Citigroup and Delta Air Lines are part of Zacks Earnings Preview
For Immediate Release
Chicago, IL – January 11, 2021 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes JPMorgan Chase & Co. (JPM - Free Report) , Wells Fargo & Company (WFC - Free Report) , Citigroup Inc. (C - Free Report) and Delta Air Lines, Inc. (DAL - Free Report) .
Big Bank Q4 Earnings Preview
The large money-center banks that will kick-off the Q4 2020 earnings season for the sector this week have suffered a significant hit to profitability as a result of the pandemic. The Q3 earnings season three months back showed business conditions starting to stabilize, with revenue weakness resulting from soft demand conditions partly offset by decelerating loan-loss provisions and effective cost controls.
Business conditions likely weakened in Q4 in response to the surging infection rates, a development that has been showing up in high-frequency economic data as well. Friday’s negative labor market reading is just the latest on that front.
While business conditions remained difficult in 2020 Q4 and are likely to remain so in the first quarter of 2021 as well, the market has learned to look past this painful period to when the ongoing vaccination exercise will reach a critical mass and put the country on the recovery path. Importantly, the market has started discounting a far more expansive fiscal policy regime from the incoming administration following the Georgia runoffs.
Bank stocks have been big beneficiaries of upgraded market sentiment, with these stocks reversing their earlier underperformance to emerge as market leaders.
The market is looking for a notable improvement in bank business conditions in 2021, particularly in the second half of the year. This has started showing in earnings estimates already, with JPMorgan’s current 2021 EPS estimate of $9.43 up from $8.51 three months back. The same for Citi has increased from $5.62 three months back to $6.19 today. Even Wells Fargo, which has been dealing with a number of company-specific issues and will be reporting results the same day as JPMorgan and Citigroup, is enjoying positive estimate revisions.
As such, the overall set up for bank earnings remains positive, with the market likely looking past Q4 results. For the Zacks Major Banks industry, which includes these major banks and account for roughly 45% of the Finance sector’s earnings, Q4 earnings are expected to decline -23.5% on -4.1% lower revenues. This would follow -17.8% earnings decline on -4.3% lower revenues.
For the Finance sector as a whole, total Q4 earnings are expected to decline -6.2% on -2.5% lower revenues.
Growth is expected to resume this year, with full-year 2021 earnings for the S&P 500 index currently expected to be up +22.7% relative to 2020 estimates. Estimates for 2021 have been steadily going up over the last six months. But we strongly feel that there is significant room for further positive revisions as the overall macro backdrop stabilizes and gets clearer, particularly in the second half of the year.
Q4 Earnings Season Gets Underway
The Q4 reporting cycle will (unofficially) get underway this week. But from our perspective, the Q4 earnings season has gotten underway already, with results from 18 S&P 500 out at this stage. These 18 index members reported results for their fiscal quarters ending in November, which we count as part of the official December-quarter tally.
We have roughly 30 companies on deck to report results this week, including 8 S&P 500 members. This week’s reporters include the aforementioned big banks and a few other major players like Delta Airlines.
For the 18 index members that have reported already, total Q4 earnings or aggregate net income is up +19% from the same period last year on +9.4% higher revenues, with 100% of the companies beating EPS estimates and 83.3% beating revenue estimates.
For an in-depth look at the overall earnings picture and expectations for the coming quarters, please check out our weekly Earnings Trends report >>>> An Improving Earnings Outlook to Start 2021
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer.
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.