JPMorgan and Wells Fargo are part of Zacks Earnings Preview

For Immediate ReleaseChicago, IL – October 14, 2024 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes JPMorgan JPM and Wells Fargo WFC.Q3 Earnings Season Kicks Off PositivelyThe market liked what it saw in the quarterly releases from JPMorgan and Wells Fargo, even though Wells Fargo came up short on the top-line while JPMorgan beat both top- and bottom-line expectations.Even more important than the two banks' Q3 EPS and revenue surprises is their favorable commentary on business trends and the economy's overall health. Questions about the economy's outlook have been front and center for the market lately, with some in the market fearing that the Fed may have delayed the onset of its easing cycle.The JPMorgan and Wells Fargo reports and management commentaries are reassuring on this count as they see a stable and positive spending environment, notwithstanding some stress at the lower end of the income distribution.While taking nothing away from the banks' positive results, part of the contributing factor to the market's favorable reaction is the reassuring read-through about the macro backdrop. This is a net positive for JPMorgan and Wells Fargo shares, which had lost ground lately.JPMorgan's Q3 earnings were -1.9% below the year-earlier level on +7% higher revenues. The bank beat EPS and revenue estimates on better-than-expected net interest earnings and also provided positive guidance on this front for the current period. The company had warned recently of elevated net interest earnings expectations for next year, which had weighed on the stock since then. They reiterated that view after the Q3 earnings release, but the market appears to be discounting that outlook following the positive Q3 results.In the core banking business, profitability remains constrained by margin pressures, cyclically soft demand for credit, and some deterioration in credit quality, albeit from a shallow level. On the capital markets side, trading revenues remain strong, and the investment banking business has started showing signs of growth but remains below the strong level two years ago.There has been talk of 'green shoots' concerning deal pipelines, which many hope will translate into actual activities in the post-election phase now that the Fed has initiated the easing cycle. JPMorgan's investment banking fees increased more than +29% in Q3, with strong activities on the debt capital markets side.The positive results from JPMorgan and Wells Fargo provide a positive read-through for the coming reports from Bank of America, Goldman Sachs, and others.Regarding the Q3 earnings season scorecard for the Finance sector, we now have results from 15.6% of the sector's market capitalization in the S&P 500 index. Total earnings for these Finance companies are down -0.1% from the same period last year on +4.7% higher revenues, with all the companies beating EPS estimates and 75% beating revenue estimates.Looking at the Finance sector as a whole, total Q3 earnings for the sector are expected to be up +4.7% on +5% higher revenues.Q3 Earnings Season ScorecardIncluding the aforementioned JPMorgan and Wells Fargo reports, we now have Q3 results for 29 S&P 500 members. Total earnings for these 29 index members that have already reported results are up +7.1% from the same period last year on +2.8% higher revenues, with 72.4% beating EPS estimates and 65.5% beating revenue estimates.The Q3 reporting cycle ramps up this week, with over 100 companies on deck to report results, including 40 S&P 500 members. Banks, brokers, and other Finance sector players dominate this week's reporting docket, but we do have a fair amount of representation from other sectors, including Proctor & Gamble, Netflix, Johnson & Johnson, Schlumberger, CSX Corp., United Airlines, and others.It is premature to identify any trends at this very early stage. Still, the favorable comparison of the revenue beats percentage will be significant if it endures through the rest of the Q3 reporting cycle.The Earnings Big PictureLooking at Q3 as a whole, combining results from the companies that have reported already with estimates for the still-to-come companies, total earnings for the S&P 500 index are expected to be up +3.6% from the same period last year on +4.5% higher revenues. This would follow the +10.2% earnings growth for the index in the preceding period on +5.5% higher revenues.Please note that this year's +7.7% earnings growth improves to +9.6% on an ex-Energy basis.For a detailed look at the overall earnings picture, including expectations for the coming periods, please check out our weekly Earnings Trends report >>> A Detailed Analysis of Q3 Earnings Expectations Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comZacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.7% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Wells Fargo & Company (WFC): Free Stock Analysis Report JPMorgan Chase & Co. (JPM): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks