Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Nyse  >  JP Morgan Chase & Company    JPM

JP MORGAN CHASE & COMPANY (JPM)
My previous session
Most popular
  Report  
SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsOfficial PublicationsSector newsTweets

U.S. banks need more than in-line third quarter to boost shares

share with twitter share with LinkedIn share with facebook
share via e-mail
0
10/11/2018 | 08:32pm CEST
FILE PHOTO: JP Morgan Chase & Co sign outside headquarters in New York

(Reuters) - Major U.S. banks, beginning on Friday, are expected to report earnings growth that exceeds that of the broader market, but that may not be enough to impress investors, who have been unimpressed by loan growth and are anticipating higher deposit rates and credit costs.

By Sinéad Carew

Investors skepticism has been significant in 2018. The S&P 500 Banks Index <.SPXBK> has fallen 3.7 percent year to date compared with a 3.6 percent increase for the S&P 500 even after a market tumble on Wednesday.

Still, Wall Street expects S&P 500 banks to report third-quarter earnings growth of 26.5 percent compared with a 21.4 percent for the broader S&P 500, according to I/B/E/S data from Refinitiv.

JPMorgan Chase & Co, Citigroup Inc and Wells Fargo will kick off the reporting season on Friday.

"It's going to be an OK quarter. Capital markets activity will be a little disappointing, " said Sandler O'Neill analyst Jeffery Harte, referring to trading results.

Even if earnings reports meet expectations, bank stock weakness may continue as analysts struggle to find the next positive catalyst but can easily identify risks such as rising deposit costs and a deterioration in credit quality.

“I don't think if the results are in line that it really gets us moving in the right direction ... you continue to have late cycle concerns weighing on the stocks," said Michael Cronin, investment manager at Aberdeen Standard Investments in Boston.

One issue is how much bank costs will rise as banks feel pressure to raise interest rates paid on customer deposits since the U.S. Federal Reserve has already raised overnight rates eight times since late 2015 and has settled into a quarterly tightening cycle.

On top of this, credit costs are so low that analysts worry they will increase if the economy deteriorates because "they can’t get much better from where they are right now," according to Cronin.

Many investors had started out the year with high hopes for bank stocks as they had expected the Trump administration's slashing of corporate taxes to boost loan growth with the broader economy. But 10 months after the tax cut, this has yet to happen and investors seem to be losing hope.

"I'm starting to think it's not going to accelerate from here," said Sandler O'Neill's Harte, adding that "it seems investors have adopted more of a ‘show me’ attitude in the face of recent trends."

Those trends include concerns about macroeconomic growth and the trade war between the United States and China.

"You've talks about tariffs and trade wars which continue to weigh on sentiment and can really impact companies decisions about whether to invest in longer term projects," said Aberdeen Standard's Cronin.

Investor concerns about loan growth are big enough they appear to be offsetting any boost from a recent spike in U.S. Treasury yields. Bank shares often rise on a steepening yield curve - when the gap between short and long dated bonds widens - as a steeper yield curve raise banks net interest income.

But banks have already erased any gains they made last week in response to a sharp increase in Treasury yields as investors are looking at the longer term.

"What's going to get incrementally better in the next year or two for bank earnings growth to accelerate?" said Sandler O'Neill's Harte. "That's what the market is wrestling with, not such much that there's a downturn looming but what's going to drive another incremental leg up in earnings growth."

(Reporting By Sinéad Carew; Additional reporting by Jonathan Spicer; Editing by Steve Orlofsky)

By Sinéad Carew

Stocks mentioned in the article
ChangeLast1st jan.
CITIGROUP -0.90% 69.71 Delayed Quote.-6.99%
DJ INDUSTRIAL -0.35% 25798.42 Delayed Quote.2.15%
JP MORGAN CHASE & COMPANY -0.57% 108.62 Delayed Quote.-0.56%
MORGAN STANLEY 0.09% 45.94 Delayed Quote.-17.15%
NASDAQ 100 2.77% 7276.4263 Delayed Quote.11.89%
NASDAQ COMP. 2.29% 7645.4895 Delayed Quote.8.60%
S&P 500 -0.59% 2809.92 Real-time Quote.3.50%
WELLS FARGO 2.17% 53.73 Delayed Quote.-12.25%
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on JP MORGAN CHASE & COMPANY
03:02aBig U.S. banks end third quarter on high note
RE
10/16JP MORGAN CHASE MPANY : OnDeck launches new subsidiary
AQ
10/16JP MORGAN CHASE MPANY : OnDeck launches new subsidiary
AQ
10/16Goldman Sachs will slow consumer loan growth if market falters
RE
10/16Goldman Sachs will slow consumer loan growth if market falters
RE
10/16Equity trading strength boosts profits at Morgan Stanley, Goldman
RE
10/16Morgan Stanley profit beats on strength in equity trading, underwriting
RE
10/16Morgan Stanley profit beats on strength in equity trading, underwriting
RE
10/16JP MORGAN CHASE MPANY : BlackRock's Fink says to not cut ties with Saudi despite..
RE
10/16JP MORGAN CHASE MPANY : Riyadh Future Investment Initiative summit on schedule f..
AQ
More news
News from SeekingAlpha
10/16WSJ : Lyft eyes first-half IPO at $15B-plus valuation 
10/16EUROPEAN FIRMS CONSIDER MOVING FINAN : Wsj 
10/16WELLS FARGO : Catalysts To Propel Higher 
10/16EARNINGS AT 3 LARGE BANKS : JPMorgan Chase, Citigroup, And Wells Fargo 
10/15Two more top finance execs pull out of Saudi conference 
Financials ($)
Sales 2018 111 B
EBIT 2018 45 999 M
Net income 2018 31 760 M
Debt 2018 -
Yield 2018 2,56%
P/E ratio 2018 11,49
P/E ratio 2019 10,65
Capi. / Sales 2018 3,23x
Capi. / Sales 2019 3,09x
Capitalization 359 B
Chart JP MORGAN CHASE & COMPANY
Duration : Period :
JP Morgan Chase & Company Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends JP MORGAN CHASE & COMPANY
Short TermMid-TermLong Term
TrendsBearishNeutralNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 30
Average target price 120 $
Spread / Average Target 13%
EPS Revisions
Managers
NameTitle
James Dimon Chairman & Chief Executive Officer
Gordon A. Smith Co-President & Co-Chief Operating Officer
Daniel E. Pinto Co-President & Co-Chief Operating Officer
Marianne Lake Chief Financial Officer & Executive Vice President
Lori A. Beer Chief Information Officer
Sector and Competitors
1st jan.Capitalization (M$)
JP MORGAN CHASE & COMPANY-0.56%359 447
BANK OF AMERICA-3.59%284 266
INDUSTRIAL AND COMMERCIAL BANK OF CHINA-12.42%268 514
WELLS FARGO-12.25%245 521
CHINA CONSTRUCTION BANK CORPORATION-11.33%210 632
BANK OF CHINA LTD-11.84%181 869