A slate of big banks will report earnings before the market opens today. The impact of inflation and interest rates will be watched closely, as will which banks can outperform their rivals on Wall Street.
"Worsening revenue trends (slowing loan growth, declining net interest margins, tempered fees) [are] widely expected," Bank of America analysts wrote in a note to clients this week. "...Asset quality to worsen and should begin to matter more as investors brace for a credit cycle."
In fact, BofA said it would lower its price objectives across its coverage by an average of 5% due to downward revisions to earnings per share forecasts.
JPMorgan Chase & Co (NYSE:JPM) is expected to post revenue of $39.64 billion and earnings of $3.87 per share, compared to revenue of $32.72 billion and earnings of $3.12 per share in the year-ago quarter.
Notably, the Zacks Consensus Estimate has improved 0.8% over the past 30 days, suggesting the company could be positioned to deliver an earnings surprise.
Wells Fargo & Company (NYSE:WFC) has a chance to mitigate what has been a less-than-ideal 2023 for its shares when the bank reports earnings before the bell Friday.
The bank is expected to post revenue of $20.16 billion and earnings of $1.22 per share, up from $18.77 billion and $0.85 per share a year earlier.
An earnings beat could go a long way to boost Well Fargo shares, which are down 4% thus far in 2023. For reference, the S&P 500 is up about 12%.
On a positive note, JPMorgan and Wells Fargo are two banks that BofA analysts say are "operating with a healthy capital cushion and offering a particularly attractive risk/reward."
Citigroup Inc (NYSE:C) is expected to report revenue of $19.27 billion and earnings of $1.19 per share, compared to revenue of $18.5 billion and earnings of $1.63 per share a year earlier.
Citi has managed an earnings surprise in each of the last four quarters.
Investors will be watching for the bank’s expenses and efficiencies, as rising operating costs have hurt Citi’s profitability, according to reports.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
Follow him on Twitter @andrew_kessel