Three of the major U.S. banks are releasing their fourth-quarter earnings reports before the markets open on Friday. Generally speaking, financial stocks have made solid gains through the end of 2016, with a tremendous tailwind from the Trump rally. The recent rate hike from the Federal Reserve has helped to bolster this industry, and there are potentially more rate increases on the horizon. With these major banks kicking off the earnings season, we shall see if this economy has a strong foundation.
24/7 Wall St. has put together a preview of some of the major financial companies that are the first to report this season. Markets have been pushed to record highs in the wake of the U.S. presidential election, and these major banks reporting can set the tone for earnings going forward.
Here, we have included the consensus earnings estimates from Thomson Reuters and the stock price and trading history, as well as some additional color on each.
The Thomson Reuters consensus estimates on Bank of America Corp. (NYSE: BAC) are calling for earnings per share (EPS) of $0.38 and $20.87 billion in revenue. The fourth-quarter from last year reportedly had $0.27 in EPS and revenue of $19.56 billion.
It appears that this bank is out of the regulatory penalty box, Also analysts are saying that it is among the best positioned to win of the larger banks, considering the higher interest rates ahead. It is valued at 0.94 times book value and at 13.7-times forward earnings expectations.
Shares were changing hands at $22.80 late on Thursday. The consensus analyst price target is $23.97, and the 52-week trading range is $10.99 to $23.39.
For JPMorgan Chase & Co. (NYSE: JPM), the consensus forecast is $1.44 in EPS and $23.95 billion in revenue. In the same period of last year, the megabank posted EPS of $1.32 and $23.75 billion in revenue.
Currently, JPMorgan is valued at 1.38 times book value, with a forward price-to-earnings (P/E) ratio of roughly 13.3. JPMorgan is considered one of the banks best positioned to benefit from Trump taking office. Not to mention that CEO Jamie Dimon is yet again considered the best major banker in America. Dimon also just recently took over the chairman position of the Business Roundtable.
Shares were last trading at $86.40. The consensus price target is just $87.24. The 52-week range is $52.50 to $87.76.
Wells Fargo & Co. (NYSE: WFC) has consensus estimates of $1.00 in EPS and revenue of $22.45 billion. The same period from last year had EPS of $1.03 and $21.59 billion in revenue.
Wells Fargo is perhaps very welcoming of a Trump presidency, for a few reasons. First, the stock has recovered handily from its huge debacle earlier this fall, and loyal shareholders were rewarded. Second, the news flow has been absolutely transfixed on Trump winning the presidency, taking some of the heat off Wells Fargo with former CEO Stumpf stepping down a distant memory. Also, it goes without saying but Wells Fargo will definitely benefit from the higher interest rates that are potentially on the horizon.
Shares were recently trading at $54.33, in a 52-week range of $43.55 to $58.02. The consensus price target is $57.37.