Earnings Previews: Citigroup, UnitedHealth, US Bancorp, Wells Fargo

The consensus second-quarter revenue estimate is $5.89 billion, up 5.8% sequentially and by 2.3% year over year. Adjusted EPS are estimated to come in at $1.07, up about 7.8% sequentially and down 16.4% year over year. Analysts are looking for full-year revenue of $24.61 billion, up 8.3%, and EPS of $4.30, down 15.7%.

The stock trades at 10.8 times expected 2022 EPS, 9.0 times estimated 2023 earnings of $5.16 and 8.3 times estimated 2024 earnings of $5.55 per share. The stock’s 52-week range is $44.79 to $63.57. U.S. Bank pays an annual dividend of $1.80 (yield of 3.98%). Total return for the past year was negative 17%.

Wells Fargo

Wells Fargo & Co. (NYSE: WFC) is the nation’s third-largest bank (measured by market cap), and its share price has dipped by about 8.2% over the past 12 months. The bank just dodged a bullet in the form of hundreds of millions of dollars in potential damages sought in two lawsuits. A federal judge in Manhattan tossed out one case and sharply limited a second.

The largest overhang for Wells Fargo remains the Fed’s asset cap prohibiting the bank from expanding its balance sheet until it cleans up regulatory issues related to the 2016 phony accounts scandal.

Analysts remain bullish about Wells Fargo. Of 26 brokerages covering the bank, six have a Hold rating and 20 have a Buy or Strong Buy ratings. At a price of around $39.60 per share, the upside potential based on a median price target of $54.50 is 37.6%. At the high price target of $67.00, the upside potential is about 69%.

Analysts are expecting second-quarter revenue to total $17.58 billion, down less than 0.1% sequentially and 13.3% lower year over year. Adjusted EPS are forecast at $0.81, down about 8.2% sequentially and by almost 42% year over year. For full fiscal 2022, EPS are forecast to slip by 18.5% to $3.99, down 18.1%, and revenue is expected to decline by 6.4% to $73.49 billion.

Wells Fargo stock trades at 9.9 times expected 2022 EPS, 7.8 times estimated 2023 earnings of $5.06 and 6.7 times estimated 2024 earnings of $5.95. The stock’s 52-week range is $36.54 to $60.30. Wells Fargo pays an annual dividend of $0.75 (yield of 2.53%), and total shareholder return for the past 12 months is negative 8.7%.

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