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Deep Dive: Big banks’ earnings reports point to near-term pain and long-term opportunity

Now that earnings reports are in for the largest 10 U.S. banks, it’s apparent that investors expect some trouble from likely interest-rate cuts by the Federal Reserve, even if the overall industry trend remains positive.

The group remains very strongly capitalized, with earnings-per-share growth benefiting significantly from share buybacks. Looking ahead, profits are expected to be pressured because of declining interest rates, which means buybacks will remain very important to support stock prices.

Earnings surprises

Here are the 10 largest U.S. bank holding companies by total assets with a comparison of actual second-quarter earnings-per-share with consensus earnings estimates among analysts polled by FactSet from before companies announced their results:

Bank holding company Ticker Total assets ($bil) Estimated quarter EPS before report Actual reported EPS from news releases Surprise
JPMorgan Chase & Co.

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