Bank Earnings Season Begins Friday: Analysts Warn Of Possible 'Sell-Off' On Day 1
Portfolio Pulse from Piero Cingari
As bank earnings season begins, major banks like JPM, BAC, WFC, C, and BK are set to report Q4 results, with mixed expectations. Wells Fargo and Bank of New York Mellon are projected to show increases in both EPS and revenue, while others may see declines. BlackRock, which launched the iShares Bitcoin Trust ETF (IBIT), will also report earnings. Analysts warn of a potential sell-off on day one, especially for bank stocks that have recently rallied. Bank of America's equity research team sees potential in WFC and BK, and lists NYCB, KEY, and TFC as top picks for 2024. The Financial Select Sector SPDR Fund (XLF) had its strongest quarter since Q1 2021.
January 11, 2024 | 6:37 pm
News sentiment analysis
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NEGATIVE IMPACT
Bank of America is expected to report a decrease in both EPS and revenue. Analysts suggest a potential sell-off on the first day of earnings season.
The expected decrease in both EPS and revenue, combined with the historical trend of bank stocks selling off on the first day of earnings, suggests a negative short-term impact on BAC's stock price.
CONFIDENCE 75
IMPORTANCE 85
RELEVANCE 90
NEGATIVE IMPACT
Citigroup is expected to report a decrease in EPS with a slight increase in revenue. The overall negative sentiment may lead to a short-term sell-off.
The expected decrease in EPS, despite a revenue increase, aligns with the broader concern of a sell-off, potentially affecting Citigroup's stock negatively in the short term.
CONFIDENCE 75
IMPORTANCE 80
RELEVANCE 85
NEGATIVE IMPACT
JPMorgan Chase is expected to report a decrease in EPS but an increase in revenue. Analysts warn of a potential sell-off on day one of earnings reports.
The anticipation of a sell-off due to recent stock rallies and the projected decrease in EPS could negatively impact JPM's stock price in the short term.
CONFIDENCE 75
IMPORTANCE 80
RELEVANCE 90
NEUTRAL IMPACT
Bank of New York Mellon is expected to report increases in both EPS and revenue. Analysts have a positive bias, which may support the stock price.
Positive expectations for both EPS and revenue, along with a positive bias from analysts, suggest that BK may withstand the broader market's sell-off pressure.
CONFIDENCE 70
IMPORTANCE 80
RELEVANCE 85
NEUTRAL IMPACT
BlackRock is expected to report a slight decrease in EPS and an increase in revenue. The launch of its Bitcoin ETF (IBIT) could also influence investor sentiment.
While a slight EPS decrease is expected, the revenue increase and the introduction of the iShares Bitcoin Trust ETF may balance investor sentiment, leading to a neutral impact.
CONFIDENCE 70
IMPORTANCE 75
RELEVANCE 80
NEUTRAL IMPACT
Wells Fargo is projected to report an increase in both EPS and revenue. Analysts have a positive outlook, which may counteract the general sell-off warning.
While there is a general warning of a sell-off, the positive projections for Wells Fargo's EPS and revenue, along with a favorable analyst outlook, could help maintain its stock price.
CONFIDENCE 70
IMPORTANCE 80
RELEVANCE 85
NEUTRAL IMPACT
The Financial Select Sector SPDR Fund (XLF) had a strong Q4 2023. The upcoming bank earnings reports could influence the ETF's performance.
XLF's performance is closely tied to the financial sector. Mixed earnings expectations for its components may lead to a neutral short-term impact on the ETF.
CONFIDENCE 65
IMPORTANCE 70
RELEVANCE 75
POSITIVE IMPACT
KeyCorp is highlighted as a preferred pick for 2024 by Bank of America, potentially boosting investor confidence.
Being named as a preferred pick by analysts could lead to increased investor interest and a positive short-term impact on KEY's stock price.
CONFIDENCE 70
IMPORTANCE 65
RELEVANCE 60
POSITIVE IMPACT
New York Community Bancorp is listed as a top pick for 2024 by Bank of America, indicating a positive long-term outlook.
The endorsement by Bank of America as a top pick for 2024 suggests a positive sentiment that could positively influence NYCB's stock in the short term.
CONFIDENCE 70
IMPORTANCE 65
RELEVANCE 60
POSITIVE IMPACT
Truist Financial Corporation is among the top bank stock picks for 2024 by Bank of America, suggesting a bullish outlook.
The positive recommendation for 2024 by Bank of America may lead to a favorable short-term reaction in TFC's stock price.
CONFIDENCE 70
IMPORTANCE 65
RELEVANCE 60