Earnings Previews: Charles Schwab, M&T Bank, State Street

In the first half hour of Thursday’s regular session, the Dow Jones industrials traded up 0.02%, the S&P 500 up 0.28% and the Nasdaq 0.87% higher.

Before markets opened on Thursday, Delta Air Lines reported a miss on the consensus earnings per share (EPS) estimate while beating the consensus on revenue. After stumbling on Wednesday following a weak forecast from American Airlines, Delta shares traded down by about 1.5% Thursday morning after CEO Ed Bastian said that demand is strong for the current quarter, especially for international travel.

Infosys reported revenue that was 16% higher than in the same quarter last year but was still short of the consensus estimate. Shares traded down about 7.2% Thursday morning.

Progressive fell short of the consensus EPS estimate but did report slightly better-than-expected revenue for the company’s first quarter. The stock traded down about 7.7%.

Before U.S. markets open on Friday, Citigroup, JPMorgan and Wells Fargo will be reporting earnings, as will BlackRock and UnitedHealth Group.

Here are previews of three more financial services companies on deck to reveal quarterly results first thing Monday morning.

Charles Schwab

Charles Schwab Corp. (NYSE: SCHW) has seen its share price fall by more than 35% over the past 12 months. Shares have plunged by almost 32% since the collapse of Silicon Valley Bank. Essentially all of that decline came after a reported block selloff of some $650 million in Schwab stock just as Silicon Valley Bank was closed by regulators. The value of Schwab’s long-term assets fell by nearly 8%, and investors got worried that, like SVB, Schwab would face a run on deposits. That did not happen, and if Schwab posts good first-quarter numbers, a share price recovery could get a jump start.

Analysts remain bullish on the stock, with 15 of 21 ratings at Buy or Strong Buy, as well as five Hold ratings. At a recent price of around $51.90 a share, the upside potential based on a median price target of $69.00 is 32.9%. At the high target of $110.00, the upside potential reaches 112%.

First-quarter revenue is forecast at $5.15 billion, which would be down 6.4% sequentially but 10.3% higher year over year. Adjusted EPS are forecast to dip by 15.4% sequentially to $0.91, or 18.2% higher year over year. The current estimates for the 2023 fiscal year call for revenue of $20.65 billion, down 0.54%, and EPS of $3.76, down 3.55%.

The stock trades at 13.8 times expected 2023 EPS, 11.2 times estimated 2024 earnings of $4.64 and 9.4 times estimated 2025 earnings of $5.53 per share. The stock’s 52-week trading range is $45.00 to $86.63. The company pays an annual dividend of $1.00 (yield of 1.93%). Total shareholder return for the past year is negative 34.37%.

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