Bank Earnings Preview: JPMorgan, Wells Fargo, Morgan Stanley, Citi, PNC to report

This week, major banks and financial institutions have released third-quarter earnings reports. FuGuo bank (WFC), JPMorgan (JPMorgan), Morgan Stanley (multiple sclerosis), Citigroup (C) and PNC Financial Services Group (PNC) are on deck to report on Friday. But analysts don’t expect bank earnings to be good overall.

“Capital markets did not improve in the third quarter of 2022 and show no signs of improvement going forward, with investment banking down significantly, CFRA research director Kenneth Lyon noted in the third quarter banking preview. Despite expected interest rate hikes, lending Interest rates “will subside to a recession in 2023” will drive net interest income.

Morgan Stanley analyst Betsy Graseck noted last week that banks are facing greater liquidity constraints and have to fund loan growth through higher deposit costs, debt and portfolio runoff from securities. Rapidly rising interest rates and higher capital requirements are causing the credit cycle to pick up speed — entering a period when lending is more expensive and harder to obtain. This puts financial institutions with excess capital, liquidity and aggressive operating leverage in the best position for the long term, she said.

Leon forecasts a further reduction in the fourth-quarter consensus and 2023 outlook. “Equity analysts are likely to lower their price targets and EPS estimates due to optimism about future declines in bank performance,” he wrote. CFRA sees 2022, driven by high inflation, Fed rate hikes, and lower consumer demand, in 2022 2022 will be “saddled with subdued banking activity”.

Wells Fargo Earnings

expect: Wells Fargo’s adjusted earnings are expected to slip 3.5% to $1.13 per share, with revenue down slightly to $18.77 billion.

WFC stock rose 0.8% in Wednesday’s trade and was up 0.8% in premarket trading Thursday. Shares have fallen 15.5% so far this year.

JPMorgan Chase Earnings

expect: Observers expect JPMorgan’s earnings to fall 22% to $2.90 a share, while revenue climbs 8.4% to $31.13 billion.

JPMorgan shares closed up about 1.6% on Wednesday after rebounding 0.9% in early trade on Thursday. It is down nearly 34.6% so far this year.

Morgan Stanley earnings

expect: Wall Street expects EPS to fall 25.5% to $1.52. Revenue fell 10% to $13.27 billion.

Shares of Microsoft fell 0.5% ahead of Wednesday’s results. Shares of Morgan Stanley are down about 22% so far in 2022.

Citigroup Earnings

expect: Citi’s adjusted earnings are expected to fall 33% to $1.44 a share on revenue rising 6.5% to $18.27 billion.

C shares rose 0.9% on Wednesday and were up 0.8% in premarket trading on Thursday, but their prices have fallen 32.4% this year.

PNC Earnings

expect: Analysts forecast PNC’s adjusted earnings to rise 13% to $3.73 per share and revenue to rise 4% to $5.4 billion.

Shares of PNC fell 1.1% on Wednesday. Shares rebounded 0.8% in early trade Thursday. So far this year, PNC is down 27.1%.

You can follow Harrison Miller on Twitter for more news and stock updates @IBD_Harrison.

You might also like:

Banking & Finance Stock News & Analysis

Get the Free IBD Newsletter: Market Readiness | Technical Reports | How To Invest

Check out the stocks on the Leaders List nearing buy points

Short-term trades can lead to huge profits. IBD’s SwingTrader shows you how

Get stock ideas from IBD experts every morning before the market opens

Source link