Earnings Previews:\u00a0 Bank of America, Bank of New York Mellon, Charles Schwab, Lockheed Martin, Morgan Stanley

The June quarter earnings hit the ground running Friday morning when several of the country’s largest financial services firms reported quarterly results.

Before U.S. markets opened Friday morning, JPMorgan Chase beat consensus estimates on both the top and bottom lines. Earnings per share (EPS) came in 10% above estimates, and revenue rose 34% year over year. Shares traded up about 1.3% early Friday morning.

Wells Fargo also reported beating the Street’s EPS and revenue estimates. EPS was 8.7% better than estimates, and revenue rose by nearly 21% year over year. The stock traded up about 0.1%.

BlackRock beat the consensus EPS estimate by nearly 9% but missed the revenue estimate by a hair. The stock traded down 1.5% early Friday, thanks to net inflows falling short of analysts’ estimates.

UnitedHealth Group beat top- and bottom-line estimates, and shares traded about 7.2% higher in Friday’s premarket session. Rising medical costs were more than offset by increased premiums, even though costs rose by 16% and premiums by 13%. 

Citigroup topped consensus EPS and revenue estimates and reaffirmed fiscal 2023 revenue guidance in line with analysts’ expectations. The stock was trading down by about 1.3%.

State Street beat the consensus EPS estimate by 3.2% but missed on revenue. Management fees decreased by 6% year over year due to net outflows in prior quarters. Shares traded down by about 5.3%.

Here’s what analysts expect to hear from five companies reporting results before markets open Tuesday morning. 

Bank of America

Shares of Bank of America Corp. (NYSE: BAC) have dropped by nearly 4% over the past 12 months. The stock has added almost 5% over the past five trading sessions despite an announced a Consumer Financial Protection Bureau fine of $250 million related to junk fees and fake accounts. As is the case with virtually every other big bank, rising interest rates will likely have boosted BofA’s net interest income by enough to offset a decline in lending. A 9% boost to its dividend payment also helps.

Analysts remain moderately bullish on BofA, with 13 of 25 putting a Buy or Strong Buy rating on the shares. Of the rest, 10 have given the stock a Hold rating. At a current price of around $29.70, the implied gain based on a median price target of $35.00 is 17.8%. At the high price target of $49.00, the implied upside is about 65%.

Second-quarter revenue is forecast at $24.94 billion, down 5% sequentially and up by 9.9% year over year. Adjusted EPS is expected to come in at $0.84, down 10.7% sequentially and up 15.1% year over year. For the full 2023 fiscal year, analysts currently forecast EPS of $3.36, up 5.3%, on revenue of $100.14 billion, up about 5.5%.

BofA’s stock trades at a multiple of 8.8 times expected 2023 EPS, 9 times estimated 2024 earnings of $3.28, and 8.4 times estimated 2025 earnings of $3.52 per share. The stock’s 52-week range is $26.32 to $38.60. BofA pays an annual dividend of $0.88 (yield of 3.0%). Total shareholder return for the past 12 months was negative 1.18%.

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