U.S. Bank Stocks Kick Off Earnings Season! Will Trump 2.0's Regulatory Easing Propel Stock Prices to New Heights?

In One Chart joined discussion · Jan 13 07:26

The latest earnings season will kick off with the banking sector. $JPMorgan (JPM.US)$, $Goldman Sachs (GS.US)$, $Citigroup (C.US)$, $Bank of New York Mellon (BK.US)$ , and $Manulife Financial (MFC.US)$ are scheduled to release their earnings on Jan. 15, while $Bank of America (BAC.US)$ , $Morgan Stanley (MS.US)$ , and $U.S. Bancorp (USB.US)$ will report on Jan. 16.

Looking back at 2024, major bank stocks performed strongly overall. Goldman Sachs and BNY Mellon posted significant gains, surging around 52% last year. $Wells Fargo & Co (WFC.US)$ , $JPMorgan (JPM.US)$ , and $Citigroup (C.US)$ all saw increases of over 40%, while Morgan Stanley rose nearly 40%, and Bank of America gained nearly 34%. Additionally, Citigroup recently hit an all-time high, and several banks, including Goldman Sachs, Wells Fargo, and JPMorgan Chase, reached record highs at the end of November last year.

Wall Street's major banks are showing signs of recovery in both market trading and investment banking, signaling a turnaround after two years of sluggish performance. Analysts anticipate that, apart from fixed income, currency, and commodity (FICC) trading, revenues across all other sectors for top global banks will grow this year for the first time since 2021, setting the stage for a profitable year.

Investment banking has already rebounded in 2024, with revenue expected to reach the third-highest level in the past decade, according to Dealogic data as of December 17. While still below the 2021 peak, the outlook remains optimistic, with more transactions in progress and a new U.S. administration streamlining merger approval processes, potentially driving further growth into the next year.

Major Banks Earnings Preview

$JPMorgan (JPM.US)$ is expected to deliver steady fourth-quarter results, building on its solid third-quarter performance despite ongoing industry challenges. The Zacks Consensus Estimate forecasts revenues of $40.92 billion, reflecting a 6.1% year-over-year increase. Additionally, the earnings estimate for the quarter has been revised upward by 2.3% in the past week to $3.95 per share, although this marks a slight decline from the prior year due to rising credit loss provisions and higher operating expenses, which are expected to weigh on the bank's bottom line.

$Bank of America (BAC.US)$ is projected to report strong results for the quarter ended December 2024, with earnings anticipated to rise 12.9% year-over-year to $0.79 per share. Revenues are expected to reach $25.25 billion, reflecting a 15% increase compared to the same period last year, driven by robust performance across its business segments.

$Citigroup (C.US)$ is forecast to achieve an adjusted profit of $1.23 per share, marking a significant 46.4% increase from $0.84 per share in the same quarter last year. In its most recent report, Citigroup posted an adjusted EPS of $1.51, beating expectations by 12.7%, despite a slight sequential decline.

$Goldman Sachs (GS.US)$ is projected to report an adjusted profit of $7.94 per share, a 44.9% increase from $5.48 per share in the same quarter last year. In the previous quarter, Goldman posted an adjusted EPS of $8.40, up 53.6% year-over-year and exceeding estimates by 22.6%.

U.S. Bank Stocks Kick Off Earnings Season! Will Trump 2.0's Regulatory Easing Propel Stock Prices to New Heights?

Trump's Returnand Banking Deregulation

As Donald Trump prepares to be sworn in as the 47th President of the United States on January 20, 2025, the banking sector is expected to become a significant investment opportunity. Market expectations suggest that Trump may reinstate policies aimed at loosening financial regulations, which would help boost banks' leverage, profitability, and dividend payouts. Bloomberg Intelligence anticipate that Goldman Sachs and Morgan Stanley could benefit more than their peers in terms of share buyback capacity if the Basel Endgame rules are delayed or significantly softened under Donald Trump's return to the White House.

Source: Bloomberg

Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only. Read more

+42