Zacks Earnings Trends Highlights: JPMorgan, Wells Fargo, Citigroup and Goldman Sachs

For Immediate ReleaseChicago, IL – January 16, 2025 – Zacks Director of Research Sheraz Mian says, "The expectation is for 2025 earnings for the S&P 500 index to be up +13.6% on +5.3% higher revenues, with all 16 Zacks sectors enjoying positive earnings growth and 10 sectors expected to have double-digit growth."Zacks Director of Research Sheraz Mian says, "The expectation is for 2025 earnings for the S&P 500 index to be up +13.6% on +5.3% higher revenues, with all 16 Zacks sectors enjoying positive earnings growth and 10 sectors expected to have double-digit growth."Q4 Earnings Season Kicks Off StrongNote: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>Here are the key points:We are off to a solid start to the 2024 Q4 earnings season, with the big banks not only coming ahead of estimates but also providing reassuring guidance for the coming quarters.One of the best things that can happen this earnings season will be for management teams to validate the robust and broad-based earnings growth expected in 2025.The expectation is for 2025 earnings for the S&P 500 index to be up +13.6% on +5.3% higher revenues, with all 16 Zacks sectors enjoying positive earnings growth and 10 sectors expected to have double-digit growth.For the Finance sector, we now have Q4 results for 21.6% of the index’s market capitalization in the S&P 500 index. Total earnings for these companies are up +23.7% from the same period last year on +10.7% higher revenues, with all the companies beating EPS estimates and 83.3% beating revenue estimates. This is notably better performance from these banks relative to other recent periods.Sunny Skies for the BanksJPMorgan JPM, Wells Fargo WFC, Citigroup C and Goldman Sachs GS surprised to the upside in their respective Q4 results. Importantly, they either explicitly guided higher for 2025 or provided a generally reassuring view of business conditions in the coming quarters.The operating environment is expected to get friendlier for the banks in the coming months and quarters, with the yield curve starting to steepen after a long period of inversion and the Trump Administration expected to ease regulatory restrictions. You can see this favorable sentiment in the chart below that plots the stock market performance of JPMorgan, Goldman Sachs, the Zacks Banking industry and the S&P 500 index since November 7th.While the operating environment for the core banking business has started to improve, banks are still faced with depressed margins and anemic loan demand. Loan portfolios at JPMorgan and Wells Fargo were only modestly up from the year-earlier level, with the gains coming in the investment banking and capital markets businesses. All of these companies reported investment banking revenue gains in excess of +20%, with strong trading volumes resulting in impressive trading revenue growth.For JPMorgan, Q4 earnings were up +15.7% from the year-earlier level, with the same for Wells Fargo, Citigroup, and Goldman increasing by +0.5%, +44.2%, and +104.7%, respectively. These better-than-expected results from the banks have helped bump the aggregate earnings growth pace for the S&P 500 index, which is now expected to increase by +8% in Q4.Tech to Remain a Key Growth DriverThe Tech sector has been a significant growth driver in recent quarters, and the trend is expected to continue in 2024 Q4 and beyond. For Q4, Tech sector earnings are expected to be up +14.7% from the same period last year on +10.1% higher revenues, the 6th quarter in a row of double-digit earnings growth.This would follow the sector’s +22.6% earnings growth on +11% higher revenues in 2024 Q3. The sector’s growth trajectory is expected to continue in the coming quarters.In addition to the Tech sector’s strong growth profile, the sector is also among the few sectors whose earnings outlook is steadily improving. This shows up in the revisions trend for the Tech sector for both Q4 and full year 2025.The Earnings Big PictureThe expectation is for double-digit earnings growth in each of the next two years, with the number of sectors enjoying strong growth notably expanding from the narrow base we have been seeing lately.In fact, 2025 is expected to have all 16 Zacks sectors enjoy earnings growth, with 10 of the 16 Zacks sectors expected to produce double-digit earnings growth. Unlike the last two years, when the Mag 7 group drove all or most of the aggregate earnings growth, we will have double-digit S&P 500 earnings growth in 2025, even without the contribution from this mega-cap group.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/performance for information about the performance numbers displayed in this press release.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. 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