While there were a few interesting earnings reports out Tuesday morning, all eyes were focused on the U.S. Labor Department’s monthly consumer price index (CPI) report. For the month of March, the CPI rose by 1.2% month over month and by 8.5% year over year. Core CPI, excluding food and energy, rose 0.3% sequentially and by 6.5% year over year. Stocks reacted by rising in the premarket session and were indicated to open the regular session on a slight upswing.
Among companies reporting earnings Tuesday morning, Canada-based marijuana grower OrganiGram jumped by more than 9% in premarket trading after beating estimates on both the top and bottom lines. CarMax reported a miss on profits and shares fell by around 8% at one point in premarket trading. Albertsons beat estimates on both the top and bottom lines, but guidance was no better than lukewarm.
Wednesday more or less marks the beginning of the March-quarter earnings season. We already have previewed four companies set to report results before markets open Wednesday: Bed Bath & Beyond, BlackRock, Delta Air Lines and JPMorgan.
Here is a look at four more big banks set to report results before markets open on Thursday.
Citigroup Inc. (NYSE: C) stock has dropped about 28% from its share price over the past 12 months. A first round of selling began in October, but the stock bounced back at the end of the year. In early February, a second round of selling sent the shares to a 52-week low. The bank’s operating leverage was negative last quarter, and investors are concerned that more of the same is in store for the first quarter of this year. Another concern is how much Citi may lose of its $9.8 billion exposure in Russia and how much of a provision the bank will have to take to protect investors.
Analysts seem to be content to wait on the sidelines. Of 25 brokerages covering the company, 11 have a Hold rating on the shares, and 13 have a Buy or Strong Buy rating. At a recent price of around $50.70 a share, the upside potential based on a median price target of $65.50 is 29.2%. At the high price target of $100.00, the upside potential is 97.2%.
First-quarter revenue is forecast at $18.18 billion, which would be up about 6.8% sequentially and down almost 6% year over year. Adjusted earnings per share (EPS) are forecast at $1.42, down 2.7% sequentially and about 61% lower year over year. For the full 2022 fiscal year, analysts are currently forecasting EPS of $6.46, down 36.3%, on revenue of $71.62 billion, down less than 1%.
The stock trades at 7.8 times expected 2022 EPS, 6.8 times estimated 2023 earnings of $7.48 and 6.0 times estimated 2024 earnings of $8.43. The stock’s 52-week trading range is $49.04 to $80.29, and Citi pays an annual dividend of $2.04 (yield of 4.04%). Its total return to shareholders for the past year was negative 28%.
The smallest of the nation’s six biggest diversified banks, Goldman Sachs Group Inc. (NYSE: GS) has posted a 12-month share price decline of about 1.1%. Since peaking in early November, the shares have recorded a drop of 23.5%. Until the fourth quarter of 2021, Goldman had reported a positive EPS surprise in six of the past eight consecutive quarters. The bank’s streak of revenue growth continued for a ninth straight quarter, but the surprise was just over 4%, the smallest growth over that streak. A slowdown in mergers and acquisitions, along with a big dip in initial public offerings, could add to the company’s woes.
Of the 27 analysts covering the stock, 16 have given it a rating of Buy or Strong Buy and the rest have a Hold rating. At a share price of around $320.75, the upside potential based on a median price target of $425.00 is 32.5%. At the high price target of $515.00, the implied upside is 60.6%.
First-quarter revenue is forecast to come in at $11.91 billion, a decline of about 5.6% sequentially and a drop of 32.7% year over year. Adjusted EPS are forecast at $8.98, down almost 17% sequentially and 53.3% lower year over year. The current estimates for the 2022 fiscal year call for revenue of $46.82 billion, down 21.1%, and EPS of $37.34, down about 37.2%.
The stock trades at 8.6 times expected 2022 EPS, 8.1 times estimated 2023 earnings of $39.84 and 7.4 times estimated 2024 earnings of $43.64. Its 52-week trading range is $308.20 to $426.16. Goldman Sachs pays an annual dividend of $8.00 (yield of 2.49%). Total shareholder return for the past 12 months was negative 1.1%.
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