Here we go.
Second quarter earnings season is here.
This quarter is expected to be the most important earnings season of the decade. The entire quarter was impacted by the COVID-19 pandemic, unlike the first quarter which saw only a minor impact at the end of the quarter.
How bad was it?
Expectations are extremely low. No doubt some companies will beat the lowered expectations. But look for a lot of surprises in the reports.
A key will be the outlook.
How is the recovery going?
The banks will lead it off and they are shrouded in mystery. They have been hoarding cash and went through another stress test. Dividends may not be as safe as many investors think.
Which of the big banks should you be keeping an eye on?
5 Bank Earnings Charts to Watch This Week
1. JPMorgan Chase JPM is considered the industry leader among the big banks. Shares have barely risen off the coronavirus lows, however. It’s trading with a forward P/E of 18. Is it really “cheap”?
2. Citigroup C hasn’t missed on earnings in 5 years. That’s impressive. Shares are up 10% over the last 3 months. It’s cheaper than JPMorgan with a forward P/E of 16.
3. Wells Fargo WFC already announced it would cut the dividend, which was expected. How much they will cut isn’t yet known as it will announce it on July 14, with earnings. Wells has the worst chart of the big banks, with 3 misses in a row. As estimates have been slashed, it is now trading with a forward P/E of 46.
4. Goldman Sachs GS beat last quarter and the analysts are bullish on this quarter, with one estimate raised in the last week. Shares are down just 9% year-to-date after staging a big rally off the coronavirus lows.
5. Bank of America BAC shares still remain down 31% year-to-date. It’s coming off a rare earnings miss last quarter. It has a forward P/E of 16. Is it the sleeper big bank?
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