3 Bank Stocks To Watch Reporting Earnings Today
With the end of the second trading week of 2022, investors are likely eyeing the top bank stocks in the stock market today. By and large, this would be thanks to some of the biggest U.S. banks kicking off the current earnings season. Notably, the current attention on the industry as a whole is higher than ever. On top of banks, arguably, setting the tone for earnings seasons, there is another factor to consider as well. Namely, investors across the board are likely eager to see how the Omicron coronavirus variant alongside rising inflation is weighing in on the economy now.
Not to mention, there are also the Federal Reserve’s plans to raise interest rates this year. As it stands, Fed members are already expecting three rate hikes in 2022 while some banks think there could be four. Nevertheless, an increase in interest rates would, naturally, serve to benefit banks. In fact, Federal Reserve policymakers recently signaled that they will start raising U.S. interest rates in March. This update comes from Fed Governor Lael Brainard on Thursday this week.
At the same time, some of the top names in the industry are not sitting idly by as well. For instance, we could take a look at the likes of Bank of America (NYSE: BAC). This week, it announced sweeping changes to its overdraft and non-sufficient fees while introducing a new cash flow forecasting solution. Both of which will ideally help the bank better serve its clients amidst rising inflation. Elsewhere, Morgan Stanley (NYSE: MS) is raising annual bonuses for its top-performing staff this year. As such, could one of these big banks reporting earnings today be worth watching in the stock market now?
Top Bank Stocks To Watch Right Now
JPMorgan Chase & Company
To begin with, we will be taking a look at JPMorgan Chase. In brief, JPMorgan is a leading financial service firm in the U.S. Among its banking industry peers, the firm is a leader in the global investment banking industry. The firm manages trillions in assets worldwide. Overall, JPMorgan provides a vast array of financial services. This ranges from serving consumers, and businesses of varying sizes to commercial banking alongside financial transaction processing and asset management.
In its latest quarterly report, JPMorgan posted an earnings per share of $3.33 on revenue of $30.35 billion. To highlight, this would be above consensus estimates of $3.01 and $29.9 billion respectively. Additionally, the company also notes that its total assets under management now add up to a whopping $3.1 trillion. This marks a sizable 15% year-over-year increase. CEO Jamie Dimon also notes that JPMorgan’s global investment banking fees are up by 37% year-over-year. The firm cites steady growth in its mergers & acquisitions division as one of the core reasons for this.
On top of that, the bank is also reporting positive year-over-year figures in its consumer-focused segments as well. This is evident from its Consumer & Community Banking sector reporting a year-over-year increase of 22% in client investment assets. Similarly, JPMorgan also reports that combined debit and credit card spending are up by 26% over the same time. Given all of this, will you be keeping a watchful eye on JPM stock?
Wells Fargo & Company
Another banking titan that is on earnings watch today would be Wells Fargo. By the company’s estimates, it currently serves one in three U.S. households and over 10% of small businesses in the U.S. Furthermore, Wells Fargo also prides itself as being the leading middle-market banking provider in the region. As you can imagine it offers a variety of financial services as well. This includes but is not limited to banking, investments, mortgage products and services, as well as consumer and commercial finance.
As it stands, WFC stock is currently up by over 10% year-to-date. Thanks to its latest quarterly earnings report, I could see this trend persisting. For the most part, Wells Fargo posted stellar figures across the board. Firstly, the bank reported an earnings per share of $1.25 for the quarter. This tops Wall Street’s estimates of $1.13. Secondly, the company raked in a total revenue of $20.85 billion, exceeding projections of $18.82 billion. If that wasn’t enough, Wells Fargo also saw its net income skyrocket by 86% year-over-year to a total of $3.09 billion.
According to CEO Charlie Scharf, the current recovery in the economy is a key growth driver for the quarter. Scharf notes “we saw increased consumer spending, higher investment banking fees, higher asset-based fees in our Wealth and Investment Management business, and strong equity gains in our affiliated venture capital and private equity businesses.” With all this in mind, would you consider adding WFC stock to your watchlist?
Following that, we have Citigroup or Citi for short. In essence, the bank currently serves approximately 200 million customer accounts and operates in over 160 countries worldwide. From consumers, and corporations to governments and institutions, Citi serves a broad range of clients. Likewise, its financial services portfolio spans consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management.
More importantly, investors will likely want to know how Citi’s latest quarterly figures square up against the competition. Well, for one thing, the firm reportedly posted an earnings per share of $1.46 on revenue of $17 billion for the quarter. This surpasses consensus projections of $1.38 and $16.75 billion respectively. However, the company’s net income is down by 26% year-over-year at $3.2 billion. Explaining this drop, the bank cites an increase in overall expenses throughout the quarter. This also includes the “pre-tax impact” from the sale of its consumer banking businesses in Southeast Asia.
Providing insight into the company’s current plans moving forward is CEO Jane Fraser. Fraser highlights, “We continue to make steady progress on executing our strategy as demonstrated most recently by the signing of an agreement to sell four consumer businesses in Asia. We are also aligning our organization and reporting structure with our strategy, including the creation of the Personal Banking and Wealth Management and Legacy Franchises segments. This will make it easier for our investors to understand the performance of our core businesses and optimize the businesses we have chosen to exit.” With Citigroup looking to streamline its business, would you consider C stock a viable long-term play?
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