Banking, finance, and taxes

What to Expect From the 3 Major Banks Reporting Friday

Chris Lange

Published: April 12, 2018 1:45 pm

Last Updated: January 12, 2020 1:29 am

Earnings season is just around the corner, and to kick off the first-quarter reports are the three major banks reporting Friday morning. Most of the time, investors can look to these major banks as a barometer for the economy as well as what to expect for this earnings season.

We are just entering into earnings season, in which most major companies will report and set a direction for the market. Here, we have included the consensus earnings estimates from Thomson Reuters and the stock price and trading history, as well as added some additional color on each.

Be advised that the earnings and revenue estimates may change ahead of the formal reports, and some companies could change reporting dates as well.

Citigroup Inc.’s (NYSE: C) fourth-quarter report is scheduled for Friday morning. The consensus forecast is $1.61 in earnings per share (EPS) on $18.86 billion in revenue. The same period of last year reportedly had $1.35 in EPS on $18.12 billion in revenue.

A few analysts weighed in on Citigroup ahead of the report:

• HSBC has a Buy rating with an $85 price target.
• Vining Sparks has a Buy rating and an $80 price target.
• Keefe Bruyette & Woods has a Hold rating with a $74 target.

So far in 2018, Citigroup has underperformed the broad markets, with its stock down 6%. However, in the past year the bank has beat the market with its shares up 18%.

Shares were recently trading at $71.62 apiece. The consensus price target is $83.89, and the 52-week trading range is $56.55 to $80.70.

JPMorgan Chase & Co. (NYSE: JPM) also is expected to release its most recent quarterly report early Friday. The consensus forecast calls for EPS of $2.29 on $27.66 billion in revenue. The fourth quarter of last year had $1.65 in EPS on $25.59 billion in revenue.

This megabank announced back in January that it plans to further expand its operations in the United States and open even more branches. According to the bank:

JPMorgan Chase intends to expand its branch network into new U.S. markets, opening up to 400 new branches over the next five years. These new branches will directly employ about 3,000 people.

Currently, the firm has 5,130 branches in 23 U.S. states and intends to expand to 15-20 new markets in several new states over the next five years. Today, Chase serves 61 million U.S. households across its Consumer & Community Banking franchise and in 2017 supported over $900 billion in consumer and small business spending through credit and debit card products. The credit card, home lending, auto finance, merchant services and business banking businesses are largely national businesses already. The Consumer Bank is starting the formal application process for national expansion.

JPMorgan is the only major bank that has outperformed the broad markets in 2018, with its stock up 3%. Over the past 52 weeks, its stock is up closer to 29%.

Its shares were trading at $113.04.49 on Thursday. The consensus target price is $122.19, and shares have changed hands between $81.64 and $119.33 in the past year.

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And Wells Fargo & Co. (NYSE: WFC) is poised to post its most recent quarterly results on Friday as well. The consensus forecast is $1.07 in EPS and $21.75 billion in revenue. A year ago, the bank posted $1.00 in EPS on $22.0 billion in revenue.

Wells Fargo has the worst of both worlds, underperforming the market in 2018 and in the past 52 weeks. Its stock is down 14% and 5% in those periods, respectively.

Fines against Wells Fargo, which has been pummeled by scandals, could reach $1 billion. According to Reuters:

Wells Fargo is facing as much as $1 billion in fines over abuses in the beleaguered bank’s mortgage and auto loan financing divisions, according to a report.

The Consumer Financial Protection Bureau is planning to levy its biggest fine ever in the coming days against the nation’s third-biggest bank, which is currently led by CEO Tim Sloan, according to Reuters.

Shares were last seen at $52.55 apiece. The consensus price target is $63.15, and the 52-week range is $49.27 to $66.31.