Banking & Finance

Earnings Previews: BlackRock, Citigroup, JPMorgan, Wells Fargo

Citigroup

The fifth-largest U.S. bank (by market cap), Citigroup Inc. (NYSE: C) has seen about 4.7% added to its share price over the past 12 months. That gain reflects a share price decline of more than 14% since early June. The combination of declining revenue in the bank’s Global Consumer Banking business, a low-interest-rate environment and the bank’s own strategy shift have weighed on the stock. Investors will be most interested to hear what the bank expects 2022 to look like, as 2021 is already in the books.

Analysts remain bullish on the stock, with 17 of 25 putting a Buy or Strong Buy rating on the shares and the other eight rating the stock at Hold. At a share price of around $67.50, the upside potential based on a median price target of $78 is 15.5%. At the high price target of $120, the upside potential is 77.7%.

Fourth-quarter revenue is forecast at $16.76 billion, down about 2.3% sequentially but up about 1.6% year over year. Adjusted EPS are forecast at $1.66, down 23% sequentially and about 20% year over year. For the full 2021 fiscal year, analysts currently forecast EPS of $10.36, up 112%, on revenue of $70.72 billion, down almost 5%.

The stock trades at 6.5 times expected 2021 EPS, 8.6 times estimated 2022 earnings of 7.82 and 8.0 times estimated 2023 earnings of 8.46. The stock’s 52-week range is $57.40 to $80.29, and Citi pays an annual dividend of $2.04 (yield of 3.09%). Its total return to shareholders for the past year is about 4%.

JPMorgan

The largest (by market cap) of the big U.S. banks, JPMorgan Chase & Co. (NYSE: JPM) has seen a share price increase of about 25% over the past 12 months. The bank’s operating leverage, the ratio between the 12-month change in expenses and revenues, is likely to be negative again as it was in the previous quarter.

Of 26 analysts covering the stock, 15 have a Buy or Strong Buy rating on the shares while another nine rate the stock at Hold. At a share trading price of around $168.40, the upside potential based on the median price target of $184 is 9.3%. At the high price target of $210, the upside potential is 24.7%.