Banking, finance, and taxes

What to Expect From 2 Megabanks Reporting Wednesday

Chris Lange

Published: January 17, 2017 10:10 am

Last Updated: January 12, 2020 3:49 pm

The U.S. economy is building momentum, and a large part of this has been the financial sector. A couple megabanks that have contributed massively to the rally are looking to report their latest earnings on Wednesday.

So far the banks that have already reported, Bank of America, JPMorgan and Wells Fargo have been solid wins for the industry, as all of them are well positioned to take advantage of the new administration’s policy decisions and the overall market sentiment going forward.

The recent rate hike from the U.S. Federal Reserve might have been too late to impact the fourth-quarter of the major banks, but it sets an optimistic outlook for the industry. The question remains whether these results will set the tone for the rest of the earnings season.

Looking at the Financial Select Sector SPDR ETF (NYSEMKT: XLF), it has made strong gains since the November election. Specifically, it has gained 17.6% from November 8 to Friday’s close of $23.51, although this pales in comparison to some of the gains that these banks have made.

Goldman Sachs Group Inc. (NYSE: GS) is scheduled to reveal its fourth-quarter results Wednesday morning. The consensus estimates call for $4.82 in earnings per share (EPS), as well as $7.72 billion in revenue. The same period of last year reportedly had EPS of $1.27 and $7.27 billion in revenue.

Shares were trading at $242.07 on Tuesday. The consensus price target is $240.04. The stock has a 52-week range of $138.20 to $247.77. So far the stock has gained 33% from November 8, but even more shocking a gain of 73.5% from the Brexit vote last summer.

The latest quarterly earnings from Citigroup Inc. (NYSE: C) are due early on Wednesday as well. The consensus fourth-quarter forecast calls for $1.12 in EPS and revenue of $17.3 billion. In the same period of last year, it posted EPS of $1.06 and $18.64 billion in revenue.

Its shares were last seen trading at $59.01, in a 52-week range of $34.52 to $61.63. The consensus price target is $64.31. So far the stock has gained 18% from November 8, but 53% since the Brexit vote.