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JPMorgan, Citigroup, Wells Fargo and BlackRock are part of Zacks Earnings Preview
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For Immediate Release
Chicago, IL – January 10, 2022 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes JPMorgan (JPM - Free Report) , Citigroup (C - Free Report) , Wells Fargo (WFC - Free Report) and BlackRock (BLK - Free Report) .
Q4 Earnings Preview: What to Expect from JPMorgan and the Other Big Banks
Bank stocks have perked up lately, as the outlook for interest rates has become more favorable to the group’s business. The market sees the coming Fed tightening cycle and the resulting projected steepening of the yield curve as a benefit to bank margins.
JPMorgan kicks-off the 2021 Q4 reporting cycle for the group on Friday, January 14th. It is expected to have earned $3.01 per share on $29.89 billion in revenues in 2021 Q4. This would represent a year-over-year change in earnings and revenues of -26.8% and +2.3%, respectively.
JPMorgan shares were down following each of the preceding 5 quarterly releases despite handily beating estimates. This makes us think that the setup is likely not very favorable for how JPM shares might be expected to behave in response to the release, particularly with the stock up more than +3% over the past month even as the S&P 500 index has modestly lost ground (down -0.5%).
Other industry players on deck to report Q4 results the same day as JPMorgan include Citigroup, Wells Fargo and BlackRock.
Bank earnings over the past year or so benefited from record capital market activities (investment banking as well as trading volumes), benign credit conditions that allowed reserve releases, partly offset by net interest margin pressures and anemic loan demand.
With respect to capital markets in the Q4 quarterly releases, we should expect continued strong numbers from JPMorgan, Citi and the other money center operators and brokers. While the group’s Q4 capital markets totals will most likely be below the strong showing in the September quarter, they will nevertheless be significantly above pre-pandemic levels. Trends in the pipeline about investment banking deal flow suggest that the strong momentum should continue in 2022, though likely below the record 2021 level.
It will be interesting to see management’s commentary about trends in the core banking business, particularly about loan demand. The group’s Q4 results are expected to show some modest improvement in loan growth, but it has so far been a lot weaker than would be consistent with the degree of rebound in household and business spending. Management’s outlook for the yield curve will also be informative.
For the Zacks Major Banks industry, which includes these major banks and accounts for roughly 45% of the Finance sector’s earnings, Q4 earnings are expected to decline -5.6% on +4.4% higher revenues. This would follow +41.6% earnings growth on +3.9% higher revenues.
For the Finance sector as a whole, total Q4 earnings are expected to increase +3.6% on 3.4% higher revenues. The chart below shows Q4 expectations for the Finance sector’s constituent industries in the context of what these industries reported in Q3 and what is expected for 2022 Q1.
The Overall Earnings Picture
Beyond the Finance sector, the expectation is for Q4 earnings for the S&P 500 index to be up +19.9% from the same period last year on +11.7% higher revenues. This would follow +41.5% earnings growth on +17.3% revenue growth in 2021 Q3.
The growth pace is expected to decelerate meaningfully over the coming quarters, but still remain positive.
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 20 S&P 500 out at this stage. These 20 index members -- including bellwether operators like FedEx, Nike, Oracle and others -- 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 and chip-maker Taiwan Semiconductor.
For the 20 index members that have reported already, total Q4 earnings or aggregate net income is up +29.3% from the same period last year on +12.8% higher revenues, with 85% of the companies beating EPS estimates and 90% beating revenue estimates.
This is too small a sample to draw any firm conclusions from.
For an in-depth look at the overall earnings picture and expectations for the coming quarters, please check out our weekly Earnings Trends report >>>> Handicapping the Q4 Earnings Season
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
As one investor put it, “curing and preventing hundreds of diseases…what should that market be worth?” This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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. www.zacks.com/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/performancefor information about the performance numbers displayed in this press release.
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JPMorgan, Citigroup, Wells Fargo and BlackRock are part of Zacks Earnings Preview
For Immediate Release
Chicago, IL – January 10, 2022 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes JPMorgan (JPM - Free Report) , Citigroup (C - Free Report) , Wells Fargo (WFC - Free Report) and BlackRock (BLK - Free Report) .
Q4 Earnings Preview: What to Expect from JPMorgan and the Other Big Banks
Bank stocks have perked up lately, as the outlook for interest rates has become more favorable to the group’s business. The market sees the coming Fed tightening cycle and the resulting projected steepening of the yield curve as a benefit to bank margins.
JPMorgan kicks-off the 2021 Q4 reporting cycle for the group on Friday, January 14th. It is expected to have earned $3.01 per share on $29.89 billion in revenues in 2021 Q4. This would represent a year-over-year change in earnings and revenues of -26.8% and +2.3%, respectively.
JPMorgan shares were down following each of the preceding 5 quarterly releases despite handily beating estimates. This makes us think that the setup is likely not very favorable for how JPM shares might be expected to behave in response to the release, particularly with the stock up more than +3% over the past month even as the S&P 500 index has modestly lost ground (down -0.5%).
Other industry players on deck to report Q4 results the same day as JPMorgan include Citigroup, Wells Fargo and BlackRock.
Bank earnings over the past year or so benefited from record capital market activities (investment banking as well as trading volumes), benign credit conditions that allowed reserve releases, partly offset by net interest margin pressures and anemic loan demand.
With respect to capital markets in the Q4 quarterly releases, we should expect continued strong numbers from JPMorgan, Citi and the other money center operators and brokers. While the group’s Q4 capital markets totals will most likely be below the strong showing in the September quarter, they will nevertheless be significantly above pre-pandemic levels. Trends in the pipeline about investment banking deal flow suggest that the strong momentum should continue in 2022, though likely below the record 2021 level.
It will be interesting to see management’s commentary about trends in the core banking business, particularly about loan demand. The group’s Q4 results are expected to show some modest improvement in loan growth, but it has so far been a lot weaker than would be consistent with the degree of rebound in household and business spending. Management’s outlook for the yield curve will also be informative.
For the Zacks Major Banks industry, which includes these major banks and accounts for roughly 45% of the Finance sector’s earnings, Q4 earnings are expected to decline -5.6% on +4.4% higher revenues. This would follow +41.6% earnings growth on +3.9% higher revenues.
For the Finance sector as a whole, total Q4 earnings are expected to increase +3.6% on 3.4% higher revenues. The chart below shows Q4 expectations for the Finance sector’s constituent industries in the context of what these industries reported in Q3 and what is expected for 2022 Q1.
The Overall Earnings Picture
Beyond the Finance sector, the expectation is for Q4 earnings for the S&P 500 index to be up +19.9% from the same period last year on +11.7% higher revenues. This would follow +41.5% earnings growth on +17.3% revenue growth in 2021 Q3.
The growth pace is expected to decelerate meaningfully over the coming quarters, but still remain positive.
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 20 S&P 500 out at this stage. These 20 index members -- including bellwether operators like FedEx, Nike, Oracle and others -- 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 and chip-maker Taiwan Semiconductor.
For the 20 index members that have reported already, total Q4 earnings or aggregate net income is up +29.3% from the same period last year on +12.8% higher revenues, with 85% of the companies beating EPS estimates and 90% beating revenue estimates.
This is too small a sample to draw any firm conclusions from.
For an in-depth look at the overall earnings picture and expectations for the coming quarters, please check out our weekly Earnings Trends report >>>> Handicapping the Q4 Earnings Season
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
As one investor put it, “curing and preventing hundreds of diseases…what should that market be worth?” This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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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.
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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. www.zacks.com/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/performancefor information about the performance numbers displayed in this press release.