The start of Q3 earnings season is finally upon us, and the first significant handful of S&P 500 companies will release their latest quarterly results this week. Of these, the most highly anticipated reports will be those of our big financial firms—including Bank of America (BAC - Free Report), JPMorgan Chase (JPM - Free Report), Citigroup (C - Free Report), and Wells Fargo (WFC - Free Report).
Major banks account for nearly half of the finance sector’s total earnings, so tracking these major U.S. financials should give us a relatively clear picture of the strength of this quarter. And after a relatively disappointing Q2 earnings season, bank stocks could use a rebound.
Banks have already starting gaining momentum on the back of the GOP’s proposed tax cuts, and a fresh batch of solid quarterly reports should be exactly what the sector needs to finish 2017 on a high note. But what should investors expect to see from these major banks? Let’s take a closer look.
1. JPMorgan Chase
With global assets worth over $2.5 trillion, JPMorgan Chase & Co. is one of the biggest financial holding companies in the world. The bank is slated to report its latest quarterly results before the bell on October 12, and its success or failure could help set the tone as the busier part of Q3 season approaches.
JPMorgan has surpassed our consensus estimate for earnings in each of the trailing seven quarters, including an impressive 15.92% beat in the latest period. Shares are up just over 4% since this latest report. The company has supported bottom line growth through streamlining efforts and branch consolidation, and an improved rate environment should offset challenges faced by its persistent fee income growth problem.
Heading into the report, our latest consensus estimates are calling for earnings of $1.67 per share and revenues of $25.40 billion, which would reflect year-over-year growth of 5.62% and 2.93%, respectively. The stock is currently sporting a respectable Zacks Rank #3 (Hold), but its negative Earnings ESP—a metric that compares the consensus estimate with the most recent estimates in order to gauge latest analyst sentiment—reduces our ability to predict an earnings beat.
