Last week, JPMorgan Chase & Co. (JPM) led off the coming parade of earnings from the big banks when it reported better-than-expected fourth-quarter and full-year earnings, though its revenue fell short of estimates.
Plenty more earnings from the financial sector are due out this week. Analysts surveyed by Thomson Reuters anticipate fourth-quarter earnings growth from American Express Co. (AXP), Bank of New York Mellon Corp. (BK), Hudson City Bancorp Inc. (HCBK), SLM Corp. (SLM) and US Bancorp (USB).
Bank of New York, Hudson City, and US Bancorp are expected to report a year-over-year increase in fourth-quarter revenue as well, but only Hudson City is expected to show both earnings and revenue growth for the full year. Hudson City, along with SLM Corp. and US Bancorp, regularly topped earnings estimates in recent quarters, and it has the highest long-term EPS growth forecast (17.5%) in this group. US Bancorp's is the lowest (6.7%), while the others are around 10.5%. And yet Hudson City and US Bancorp are the only ones on this list that do not have a First Call recommendation to buy. American Express, Hudson City, and SLM were upgraded by analysts recently. Shares of American Express and SLM have risen more than 17% in the past three months. BK has been range bound between $25 and $30 since May, while Hudson City and US Bancorp have struggled with resistance around $14 and $25, respectively, since August.
Those financials expected to report this week that they swung to a quarterly profit include Capital One Financial Corp. (COF) Goldman Sachs Group Inc. (GS), Morgan Stanley (MS) and PNC Financial Services Group Inc. (PNC).
Of these, only Morgan Stanley is expected to post a loss for the full year. Goldman Sachs is the only one that has regularly topped earnings estimates in recent quarters. Goldman Sachs also has the highest long-term EPS growth forecast (11.6%), while PNC has the lowest (7.7%). Morgan Stanley and Goldman Sachs have consensus buy recommendations, but also saw declining share prices over the past three months. Capital One shares and PNC shares have grown about 13% and 26%, respectively, in that time, with the latter trading near its 52-week high.
Analysts are looking for narrower losses from Citigroup Inc. (C), Fifth Third Bancorp (FITB), First Horizon National Corp. (FHN), Huntington Bancshares Inc. (HBAN), Keycorp (KEY), Marshall & Ilsley Corp. (MI), SunTrust Banks (STI) and Wells Fargo & Co. (WFC).
Fifth Third, First Horizon, and Marshall & Ilsley are expected to report lower revenue as well. Among the companies in this group, Fifth Third and Wells Fargo are expected to post profits for the full year. Citigroup, Fifth Third and Wells Fargo have tended to beat earnings expectations in recent quarters. Only Wells Fargo has a respectable long-term EPS growth forecast (12.0%) here, but it also has an earnings multiple of 21x. There are no consensus buy recommendations among this lot. Shares of First Horizon are about 3% higher than three months ago, while those of Citigroup, Huntington and Marshall & Ilsley have fallen in that time. Fifth Third shares have met resistance around $11 since August. Keycorp has been range bound between $5 and $7 since June, SunTrust between $20 and $24 since August, and Wells Fargo between $25 and $30 since August.
In the category of still in the black, but with falling earnings (for both the quarter and the year), analysts expect to see BB&T Corp. (BBT), M&T Bank Corp. (MTB), Northern Trust Corp. (NTRS) and State Street Corp. (STT).
Northern Trust and State Street are expected to post lower fourth-quarter revenue as well. Here, only State Street has tended to beat earnings estimates in recent quarters. Northern Trust has the highest long-term EPS growth forecast (11.8%); M&T has the lowest (4.7%). No consensus buy recommendations in this group either, and all four saw share prices fall in the past three months, though BB&T and M&T have headed north again in recent weeks.
Outside the financial sector, analysts are looking this week for earnings growth from Google (GOOG), IBM (IBM), Starbucks (SBUX) and McDonald's (MCD). On the other hand, eBay (EBAY), General Electric (GE), Schlumberger (SLB), Southwest Airlines (LUV) and UnitedHealth Group (UNH) are expected to post lower earnings.