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Will Wells Fargo, JPMorgan Hit or Miss With Q1 Earnings?

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Get ready for weak earnings, starting early Friday.

That’s the conclusion of analysts at FactSet, who anticipate an average decline in earnings of 4.2% for companies in the S&P 500 Index. Just four months ago, analysts were looking for an average expected gain of 2.8% among those companies.

The last quarter with average earnings declines was Q2’16.

First out of the gate this week among the largest financial companies are JPMorgan Chase and Wells Fargo. Analysts expect JPMorgan to report earnings per share of $2.32, up 1% from a year ago, and revenues of $28.07 billion.

Wells Fargo — seeking a new CEO after Tim Sloan’s recent departure and also selling its retirement-plan business — could report EPS of $1.08, down about 1% from last year; sales are anticipated to be $20.87 billion.

First Republic Bank is also reporting earnings Friday. It is expected to report EPS of $1.22 and revenues of $813.41 million.

According to Keefe, Bruyette & Woods’ analysts, loan growth at the big banks was down nearly 5% in January and February vs. October and November 2018; the weakness is tied to soft commercial lending.

More to Come

On Monday, Citigroup and Charles Schwab will post their Q1 results, followed by Bank of America and BlackRock on Tuesday. Wednesday’s earnings reports include Morgan Stanley.

(Earlier this week, BofA said it planned to raise its minimum wage to $20 an hour over two years. It is also working on a digital portal to help clients achieve goals such as homebuying and retirement savings, CNBC reported Thursday.)

On April 23, TD Ameritrade and State Street will announce their quarterly results, followed by Ameriprise Financial and Raymond James on April 24. UBS will share its latest performance on April 29.

On May 2, LPL Financial will post its Q1 results. Analysts with William Blair recently lowered their estimated earnings for the independent broker-dealer to $1.70 from $1.75. LPL’s EPS was $1.11 in Q1’18 and $1.49 in Q4’18.

— Check out 12 Best & Worst Broker-Dealers: Q4 Earnings, 2018 on ThinkAdvisor.


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