Financials

Wells Fargo’s ‘Focus List’ – GOOGL, TJX, XOM, JPM

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Wells Fargo Investment Institute analysts updated their “focus list” of stocks. These stocks represent the top picks from Global Investment Strategy and Global Securities Research analysis that are expected to exceed the total return of the S&P 500 (SP500) over the next 12 months. Here is the list: Communication services Alphabet (GOOGL) – Consensus next 12 months EPS: $8.61; EPS long-term growth estimate: 13% Meta Platforms (META) – Consensus next 12 months EPS: $24.35; EPS long-term growth estimate: 13% Netflix (NFLX) – Consensus next 12 months EPS: $22.77; EPS long-term growth estimate: 31% T-Mobile (TMUS) – Consensus next 12 months EPS: $10.41; EPS long-term growth estimate: 14% Consumer discretionary Amazon (AMZN) – Consensus next 12 months EPS: $5.85; EPS long-term growth estimate: 25% Hilton Worldwide Holdings (HLT) – Consensus next 12 months EPS: $7.65; EPS long-term growth estimate: 8% The TJX Companies (TJX) – Consensus next 12 months EPS: $4.32; […]

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Morgan Stanley Benefited From ‘Solid’ Wealth Management Results in Q3, Oppenheimer Says

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Morgan Stanley’s (MS) Q3 earnings-per-share beat was driven by “solid” wealth management results together with “sizable uplift” from beats across results in investment banking and trading, Oppenheimer said in a note Thursday. Oppenheimer also said total revenue exceeded expectations, driven by investment banking and trading. “Overall, we see Q3 as continued evidence of MS executing well, which we view as largely priced into the current valuation,” Oppenheimer said. Oppenheimer said that for 2025, it is boosting its EPS forecast for Morgan Stanley by about 2.4% mainly because of the flow-through effect of a higher base of trading expected in 2024 as well as wealth management assets under management and revenue. Oppenheimer has a perform rating on Morgan Stanley.

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Lower Interest Rates Yield a Loser: Berkshire Hathaway — Barrons.com

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Andrew Bary Berkshire Hathaway was a major beneficiary of the sharp increase in short rates from 2022 through early this year but now stands to lose given the drop in short rates now unfolding with the Federal Reserve’s half-point cut in a key short rate Wednesday. Berkshire had the largest holdings of cash and equivalents of any U.S. company at $277 billion at the end of the June, compared with Apple at $153 billion and Alphabet at $101 billion. The bulk of Berkshire’s cash is invested in short-term Treasury bills which have maturities of under a year. Berkshire CEO Warren Buffett is partial to three and six-month T Bills that are auctioned weekly by the Treasury. Berkshire held $234 billion of T-Bills at the end of June. Berkshire’s interest and other investment income was up sharply in the first half of 2024, rising 80% to $4.5 billion before taxes from

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Morgan Stanley Stock Drops. Why Goldman Sachs Downgraded the Shares.

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Morgan Stanley has been a premium stock among its peers in recent years, with shareholders benefiting from its combination of investment banking and wealth management. However, the stock’s outperformance could be coming to an end, according to Goldman Sachs analysts. Morgan Stanley shares were down 2.1% at $94.56 in morning trading Wednesday after a Goldman Sachs team led by analyst Richard Ramsden downgraded the stock to Neutral from Buy. That leaves them a little more than 10% below the record high they hit this summer. Ramsden lowered his 12-month price target on Morgan Stanley stock to $105 from $122. “MS has a best-in-class investment bank, which has taken notable share over the past decade, and a leading wealth management platform, both of which have contributed to strong return improvement,” Ramsden wrote in a research note. “However, as we move further into the investment banking cycle, we see other names as

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Goldman Sachs’s Focus on Wall Street Boosts Earnings

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Goldman Sachs’s strategy to refocus on its core Wall Street operations continues to pay off. Goldman’s second-quarter revenue increased 17% from a year ago to $12.73 billion, led by its asset and wealth management business, where it manages investments for large institutional clients and wealthy individuals, and an increase in investment banking fees. Goldman’s overall profit increased 150% from a year ago, when the bank was in the middle of a pullback from consumer lending, to $3.04 billion. Goldman has been undergoing a strategy shift, exiting consumer-lending after incurring billions of dollars in losses. The bank is instead refocusing on its core businesses of dealmaking and trading while growing its asset and wealth management division. Investment banking revenue was $1.73 billion, up 21% from a year ago, led by big increases in debt and equity underwriting revenue. Still, it was down from Goldman’s first quarter this year and the rise

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Citigroup Second-Quarter Results Top Views Amid Jump in Investment Banking Revenue

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Citigroup (C) on Friday posted better-than-expected results for the second quarter, aided by a surge in investment banking revenue. Earnings rose to $1.52 a share for the quarter through June 30 from $1.33 a year earlier, while revenue increased 4% to $20.14 billion, topping Wall Street’s views for $1.41 and $20.09 billion, respectively. The company said revenue growth included a roughly $400 million gain tied to an exchange of shares in credit card giant Visa (V) completed during the quarter. “Our results show the progress we are making in executing our strategy and the benefit of our diversified business model,” Citigroup Chief Executive Jane Fraser said. “Markets had a strong finish to the quarter leading to better performance than we had anticipated.” Banking revenue surged 38% to $1.63 billion, led by a 60% jump in investment banking amid “strong” issuance activity in debt capital markets and an increase in initial

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S&P Global Revenues Look Up On Climbing Debt Issuance

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With 2Q global debt issuance well above his expectations, Raymond James analyst Patrick O’Shaughnessy sees significant earnings upside for ratings powerhouse S&P Global. In a research note, O’Shaughnessy also says rallies across multiple stock markets and the S&P’s acquisition of investment research provider Visible Alpha complete the rosy picture. Raymond James, which has an outperform rating on shares, raises its target price on S&P Global to $491 from $462. S&P Global is up 0.6% to $463.08.

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Big Banks Continue to Feel Pressure From Higher Rates

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Higher interest rates continue to pressure some of the country’s biggest banks, and their lending machines are showing signs of consumer weakness. JPMorgan Chase and Wells Fargo both reported a drop in quarterly profit Friday. Citigroup posted a rise in profit, driven in part by the bank’s cost-cutting measures, but set aside more provisions for potential losses in their credit-card business. JPMorgan’s second-quarter profit declined 9% year-over-year to $13.1 billion. That figure excludes an $8 billion gain the bank received on an exchange of its shares of Visa and other one-time items. The bank’s net interest income, a measure of the difference between what banks pay out on deposits and charge on loans, rose to $22.9 billion, up 5% versus a year earlier. JPMorgan Chief Executive Jamie Dimon repeated his view that interest rates could wind up staying higher than some economists have forecast. “Market valuations and credit spreads seem

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Big Banks Writing Off More Bad Debt

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Major banks increase their net charge-offs, or the debt they’re owed but don’t expect to recover. JPMorgan Chase charge-offs rise $820 million in 2Q to $2.2 billion, as more credit cards were opened and credit conditions continued to normalize. Wells Fargo net charge-offs rise 71% in 2Q to $1.3 billion, with charge-offs from commercial real estate loans increasing, particularly in its office portfolio, though commercial and industrial loans were a drag too, with higher charge-offs recorded in its credit card portfolio. Citigroup’s cost of credit rose $1.5 billion to $2.3 billion on a 59% jump in credit losses from higher interest rates and persistent inflation prompting the bank to lift its provision for loan losses.

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Citigroup Q2 Earnings: Personal Banking Growth, Profit Growth, In-line Outlook And More

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Citigroup Inc (NYSE:C) reported a second-quarter fiscal 2024 revenue growth of 4% year-over-year to $20.14 billion, beating the analyst consensus estimate of $20.07 billion. GAAP EPS of $1.52 beat the analyst consensus estimate of $1.39. Net credit losses were $2.28 billion, up 52% year-over-year. Services revenue grew 3% year-over-year to $4.7 billion, primarily reflecting strength in Securities Services and the impact of continued underlying momentum in Treasury and Trade Solutions. Markets revenue increased by 6% Y/Y to $5.1 billion, driven by Equity market revenue growth. Banking revenue increased 38% Y/Y to $1.6 billion, driven by Investment Banking and Corporate Lending. U.S. Personal Banking revenue grew 6% Y/Y to $4.9 billion, driven by higher net interest income. Wealth revenue grew 2% to $1.8 billion, driven by a 13% increase in non-interest revenue. All other revenue declined 22% year over year to $2.0 billion, primarily due to closed exits and winddowns and

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Citigroup Second-Quarter Results Top Views Amid Jump in Investment Banking Revenue

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Citigroup (C) on Friday posted better-than-expected results for the second quarter, aided by a surge in investment banking revenue. Earnings rose to $1.52 a share for the quarter through June 30 from $1.33 a year earlier, while revenue increased 4% to $20.14 billion, topping Wall Street’s views for $1.41 and $20.09 billion, respectively. The company said revenue growth included a roughly $400 million gain tied to an exchange of shares in credit card giant Visa (V) completed during the quarter. “Our results show the progress we are making in executing our strategy and the benefit of our diversified business model,” Citigroup Chief Executive Jane Fraser said. “Markets had a strong finish to the quarter leading to better performance than we had anticipated.” Banking revenue surged 38% to $1.63 billion, led by a 60% jump in investment banking amid “strong” issuance activity in debt capital markets and an increase in initial

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