Ahead of earnings season 2017: POST forecastStaff Writer | January 13, 2017
The earnings season start with big banks this Friday before the bell. "The Big Three" - Wells Fargo, Bank of America, and J.P. Morgan Chase - will set the tone for all stock exchanges.
Earnings season Financial institution
Wells Fargo saw a bad year in 2016, with several investigations and lawsuits, followed by some deals being broken and falling number of new accounts. However, it seems the bank is strong enough to go through turbulent times, which should be reflected in their earnings reports.
Although the bank failed the assessment for the second time, its sheer size prevents it to go under water just like that. So, POST expects Q4 EPS to be around $1.02 on revenue of $22.47 billion.
Bank of America
Bank of America improved some trading revenues and fees, but it saw some weaknesses in higher credit costs and equity trading. On the other hand, it put in place expenses control and all that led to jump in investors optimism: company's stock jumped more than 41 percent in the last three months.
Bank of America is well-positioned to answer to possible market pressures and with good internal cost control is it poised to present good results. POST expects EPS to be $0.39 on revenue $20.8 billion.
J.P. Morgan Chase
J.P. Morgan Chase CEO said last month that he expects trading revenue to rise about 15%, which is a good sign. Add to that higher activity in fixed-income trading and record equity indexes, and you get a good bank led by one of the most respected bankers.
Since oil prices stabilized lately, so company's exposure in that sector should stabilize too. For J.P. Morgan Chase POST expects EPS of $1.47 on revenue $23.59 billion. ■