Are These The Top Bank Stocks To Invest In This Week Ahead Of Earnings?
As we kick off the second-quarter earnings season, bank stocks are in focus in the stock market this week. Now, before we go into the details, newer investors may be wondering, what’s the big deal with bank stocks? Well, for one thing, bank stocks often follow the economy closely in terms of performance, essentially making them cyclical stocks. Given the general trajectory of the economy, some would consider bank earnings a key indicator of the current reopening trade now. With consumer spending at a high this year, could the banks continue to perform?
If anything, Bank of America (NYSE: BAC) seems to believe so. Namely, analysts at the firm believe that U.S. banks, in general, could see their earnings surge 204% year-over-year this quarter. This would support the overall positive sentiment regarding this earnings season as well. According to the financial data firm FactSet (NYSE: FDS), S&P 500 companies could see their aggregate earnings surge by 64% year-over-year. This would mark the fastest growth pace for the index since 2009. With analysts and institutional investors predicting major gains for bank stocks this week, investors could be watching closely.
Aside from BAC, the likes of Citigroup (NYSE: C) and Wells Fargo (NYSE: WFC) are also set to release their second-quarter earnings later this week. Indeed, both companies’ shares have recovered tremendously since their pandemic era lows. We can see this as both C stock and WFC stock are up by over 80% in that time. Chances are, if you are reading this, you might be interested in the top bank stocks yourself. Should that be the case, here are three in the spotlight in the stock market today.
Top Bank Stocks To Buy [Or Sell] In July 2021
JPMorgan Chase & Company
JPMorgan is a leading financial services firm headquartered in New York City. It has operations worldwide and boasts $3.7 trillion in assets and $286.4 billion in stockholders’ equity. The company is a leader in investment banking and financial services for consumers and small businesses. JPM stock currently trades at $154.47 as of 10:46 a.m. ET and has been up by over 60% in the last year. Today, the company had just announced stellar second-quarter financials.
Firstly, JPMorgan posted revenue of $30.5 billion. Secondly, the company posted a net income of $11.94 billion, up by 155% year-over-year. This was driven by credit reserve releases of $3 billion compared to credit reserve builds of $8.9 billion in the prior year. The company says its consumer & community banking combined debit and credit card spending was up 45%. Impressively, it was also up 22% versus the pre-pandemic second-quarter of 2019.
Company CEO Jamie Dimon said that JPMorgan delivered solid performance across all its businesses with over $30 billion in revenue while continuing to make significant investments in technology, people, and market expansion. The company also extended credit and raised $1.7 trillion in capital for businesses, institutional clients, and U.S. customers in the first half of 2021. Given these impressive financials, will you consider JPM stock a top bank stock to buy?
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Goldman Sachs Group Inc.
Goldman Sachs is a leading global financial institution. It delivers a broad range of financial services that include investment management, consumer banking, and investment banking to a large client base. GS stock currently trades at $373.04 as of 10:46 a.m. ET and has been up by over 80% in the past year. The company, like JPMorgan, also posted very impressive financials for its second quarter today.
Diving in, the company posted a record net revenue of $15.39 billion for the quarter. Also, it reported net earnings of $5.49 billion for this latest quarter. Goldman Sachs also posted diluted earnings per common share (EPS) of $15.02 compared with $0.53 for the second quarter of 2020. Furthermore, its annualized return on average common shareholders’ equity (ROE) was 23.7% for the quarter. The company continues to see strong overall firm performance in the second quarter as results reflected in record financials this time.
Besides, the company’s investment banking segment generated its second-highest quarterly net revenue at $3.61 billion, which also follows record net revenues in the first quarter of 2021. In addition, Goldman Sachs ranked #1 worldwide announced and completed mergers and acquisitions, worldwide equity, and equity-related offerings. It also saw record revenues in its asset management and consumer & wealth management segments. All things considered, will you consider GS stock a buy right now?
Following that, we have investment banking company, Morgan Stanley. The New York-based firm is another top name to know during this exciting earnings week. In brief, Morgan Stanley boasts a global portfolio of financial services that include wealth management, securities, and investment management services among others. For a sense of scale, the bank has operations in over 41 countries across the globe. Through all of this, it serves a wide array of clients ranging from corporations and governments to individuals. With MS stock currently trading at $92.10 as of 10:47 a.m. ET, could it be worth investing in now?
For the most part, the company appears to be kicking into high gear ahead of its earnings release this Friday. Late in June, Morgan Stanley announced a 100% increase to its quarterly dividend from $0.35 to $0.70. Adding to that, it is also planning to repurchase up to $12 billion through June 2022. Overall, it seems like the bank is making the most of its current momentum to provide greater shareholder value. Moreover, Morgan Stanley also launched its Next Level Fund in partnership with Microsoft (NASDAQ: MSFT) and Walmart (NYSE: WMT) last month. The fund aims to invest in disruptive tech-enabled start-ups which would broaden its stake in more emerging fields.
At the same time, Morgan Stanley also reported solid figures in its first-quarter fiscal posted in April. In it, the bank raked in total revenue of $15.82 billion for the quarter. This would indicate a 68% year-over-year increase. Additionally, the company also saw massive year-over-year surges of 142% in net income and 116% in earnings per share. Should Morgan Stanley maintain its current pace, would you consider MS stock a top buy this week?