Big Banks Set to Kick Off Earnings Season with Mixed Results Expected
The fourth quarter earnings season has arrived and it will kick off with earnings reports from Citigroup (C), JPMorgan Chase (JPM), and Wells Fargo (WFC) on January 15. The companies are expected to see earnings move in different directions compared to what we saw in the third quarter and compared to Q4 of last year.
Citigroup’s EPS estimate is $1.33 and that is 5% lower than the third quarter EPS figure and 38.14% lower than Q4 of 2019. JPMorgan’s EPS estimate is $2.57 which is in line with Q4 of 2019, but 12% lower than Q3. Wells Fargo has the best outlook with an EPS estimate of $0.59. That’s only a penny below the fourth quarter of last year and much better than $0.42 the company lost in the third quarter.
Bank stocks have been among the top performing industries since the end of October and the SPDR S&P Bank ETF (KBE) has gained 37.4% since then. The S&P is up a far more modest 17% during this same time period. Looking at the Tickeron Screener, JPMorgan gets a “strong buy” rating while the other two get “buy” ratings.
On the fundamental analysis, JPMorgan has two positive signals and two negative signals. The company gets positive marks for its Outlook Rating and its Profit vs. Risk Rating and it gets negative marks for its Valuation Rating and SMR Rating.
Citigroup gets a positive score in the Valuation Rating, but it gets four negative marks including the Outlook Rating and the SMR Rating. Wells Fargo gets a positive reading for its P/E Growth Rating, but it also gets four negative marks. The Profit vs. Risk Rating is a 100 and that’s the worst score a company can get. Like the other two, Wells Fargo also gets a poor score for its SMR Rating.
Turning our attention to the technical analysis, all three stocks have received bullish signals from the Momentum indicator over the last few weeks—not surprising given how bank stocks have been rallying. Citigroup got a bullish signal from its MACD indicator on January 8 and Wells Fargo got one on January 7. Those two also got bearish signals from the Bollinger Bands indicator on January 7.
The completer comparison from Tickeron between these three banks is below and it shows how the stocks compare to one another and how they compare to other stocks based on the ratings.
KBE in downward trend: price dove below 50-day moving average on April 30, 2024
KBE moved below its 50-day moving average on April 30, 2024 date and that indicates a change from an upward trend to a downward trend. In of 48 similar past instances, the stock price decreased further within the following month. The odds of a continued downward trend are .
Technical Analysis (Indicators)
Bearish Trend Analysis
The 10-day RSI Indicator for KBE moved out of overbought territory on April 01, 2024. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 38 similar instances where the indicator moved out of overbought territory. In of the 38 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 69 cases where KBE's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where KBE declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on April 24, 2024. You may want to consider a long position or call options on KBE as a result. In of 85 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for KBE just turned positive on April 23, 2024. Looking at past instances where KBE's MACD turned positive, the stock continued to rise in of 41 cases over the following month. The odds of a continued upward trend are .
The 10-day moving average for KBE crossed bullishly above the 50-day moving average on April 30, 2024. This indicates that the trend has shifted higher and could be considered a buy signal. In of 16 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where KBE advanced for three days, in of 291 cases, the price rose further within the following month. The odds of a continued upward trend are .
KBE may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Aroon Indicator entered an Uptrend today. In of 240 cases where KBE Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Fundamental Analysis (Ratings)
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Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
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Category Financial