(Bloomberg) – JPMorgan Chase & Co. usually starts the bank's earnings season. The company's performance and Jamie Dimon's comments are a widely observed signal of how peers are likely to trade. This quarter, Citigroup Inc. is in the spotlight with the release of its fourth quarter results Monday morning, followed by JPMorgan and Wells Fargo & Co. on Tuesday.
Bank stocks have recovered so far this year after an appalling 2018 year. The KBW Bank index rose more than 5%, up 3.4% on the S & P 500. This rebound comes after the fall of nearly 20% in the banking gauge last year. Determining if there is more relief in reserve will be a priority for investors.
Analysts became increasingly pessimistic about the earnings approach and proceeded to a series of rating cuts and price targets earlier this month. On Friday afternoon, earnings per share estimates for the fourth quarter were down, according to data compiled by Bloomberg, with Goldman Sachs Group Inc. being the worst affected among the six largest banks. .
Eyes turned to Citigroup, the bank's cost ratio outlook for 2019 will be critical, according to Alison Williams, senior analyst at Bloomberg Intelligence. "Critical variables for all banks include geopolitics, loan growth, financial market revenues and spending prospects," Williams said.
In early December, CFO John Gerspach warned Citi of the possibility that his income would fall in the last three months of the year. Gerspach warned that volatility could hamper the goals for 2018, causing stocks to fall.
It is in this spirit that "the future of Citi and an update of the bank's financial objectives" will now attract attention, commented Credit Suisse analyst Susan Roth Katzke in a note. "Rather than setting another goal for short-term efficiency, we expect and prefer a focused commitment to" flatten out spending "until 2020.
Katzke highlighted other important points, including management's stance on the economy, global economic growth and the health of the financial markets. She highlighted indications regarding card margins and retail banking growth in North America, including updates on the company's national digital banking and growth prospects in Mexico and Asia. She also discussed discussions on investment bank pipelines and a quick read on the trading market, the weakness of the fourth quarter and the quality of credit.
For JPMorgan, watch for "macro commentary" given the recent weakness of many asset classes and the high cost focus, Deutsche Bank wrote Matt O'Connor in a note. For Wells Fargo, three areas are targeted: regulatory updates and "fears that the asset ceiling persists", if spending will exceed expectations in 2019 due to persistent regulatory issues and if revenues can continue to increase.
O & # 39; Connor told Bank of America Corp. that, for Goldman, investors should focus on "a possible update of FICC's strategic review, new activity reports and comments / reservations related to 1MDB's emissions. He also noted that it would be the first call for results from Goldman's new chief executive officer, David Solomon. Morgan Stanley's market share gains have been impressive, but additional efficiency efforts are needed and appear to be forthcoming.
Williams, of BI, expects JPMorgan to "record another solid quarter with an overview" of President and CEO Dimon. She predicts that "a lot of details" about the bank's prospects will be saved for Investor Day on February 26th.
Wells Fargo will likely start in 2019 "a little cleaner after another legal settlement," although a combination for that and a gain on portfolio sales darken the quarter, Williams said. "The lifting of the asset ceiling of the penalty bank is the key, but it is unlikely that we will find much novelty there." For Goldman, "the biggest problem for the stock" is the cost clarity of 1MDB.
Expected Earnings Release Monday 8:00 AM UK Adjusted 4-hour EPS $ 1.55 ($ 1.47 to $ 1.63 range) Fourth quarter adjusted estimated revenue of $ 17.56 billion (range from $ 17.27 billion to $ 18.47 billion) Rev. $ 2.88 billion equity $ 671.9 millionFICC $ 2.23 billion per day. $ 1.18b Call 10h, 866-516-9582 password: 4793298View Bloomberg Intelligence 4Q overview: Citigroup's global key view in the form of an expected cost reduction (Jan. 9)
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Publication of results expected Tuesday at 7:04 am EPS estimated at 2.21 USD (range 2.05 USD to 2.41 USD) 4Q adj. tower. is. $ 26.93 billion (range 26.05 billion to $ 28.12 billion) 4th round total trade. $ 3,57bquities $ 1,32bFICC $ 2,29bI-banking rev. Estimate: $ 1.77 billion net return on estimated interest bearing assets 2.54% Provision for fourth quarter credit losses is estimated at $ 1.31 billion Call 8:30, 866-541-2724Show an overview of Bloomberg Intelligence 4T: JPMorgan to deliver strong quarter despite uncertainty (Jan. 10)
Expected Earnings Announced Tuesday 8am4 Estimated EPS at $ 1.19 (range $ 1.14 to $ 1.33) estimated net profit margin of 4T at 2.95% of estimated net expense of $ 736.8 million US provision for bad debts of $ 675.4 million preview: More progress in Wells to meet less US certainty (January 10)
BANK OF AMERICA
Publication of results expected Wednesday at 6:45 am4Q adj. EPS is 63c (range 59c to 67c) 4Q rev. net of interest expense estimated at $ 22.36 billion (range $ 22 billion to $ 22.90 billion) is. $ 2.64 billion in equity $ 1.01 billionFICC $ 1.64 billion per bank-rev. estimated $ 1.23 billion estimated net interest yield 2.44% provision for credit losses fourth quarter is estimated at $ 938.7 million call 8am, 877-200-4456 pw: 79795See Bloomberg preview 4Q Intelligence: BofA Core Loan Trends, US View Central to Outlook (January 11)
Publication of expected results Wednesday at 7:30 AM4 adj. EPS estimated at $ 4.57 (range 2.29 USD to 6.88 USD) 4Q net rev. is. $ 7.54 billion (range $ 6.02 billion to $ 8.60 billion) 4th round total transactions. $ 2,5b $ 1,57bFIFC 976,3MI-banking rev. is. $ 1.93b Call 9:30 am, 888-281-7154See Bloomberg Intelligence 4Q preview: Goldman Legal Risk casts longer shadow than markets (Jan. 11)
Publication of results expected Thursday at 7:04 am BPA is estimated at 91c (range 76c to $ 1.07) 4Q net rev. is. $ 9.35 billion (range $ 8.97 to $ 10.17 billion) 4th round total transactions. $ 2.82 billion equity $ 2.01 billionFICC $ 822.5 million in rev. is. $ 1.35 Call 8am, 877-895-9527 pw: 9891188See Bloomberg's 4T Intelligence preview: Morgan Stanley Wealth Critical, trading should win (Jan. 11)
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