Bank Of America Earnings Leap 18%; Goldman Sachs Posts Mixed Results; Morgan Stanley On Deck

Banks continue their flurry of earnings reports this week as investors cautiously eye results following the March rout of banking stocks. Bank of America topped expectations with a major earnings surprise early Tuesday. Goldman Sachs posted mixed results while Bank of New York Mellon is set to report. Morgan Stanley and U.S. Bancorp announce earnings Wednesday.

X

JPMorgan (JPM), Wells Fargo (WFC) and Citigroup (C) kicked off earnings last week with major beats for the big banks, driven by spikes in net interest income. However, analysts expect drops in investment banking revenue to weigh on results.

Bank of America

Results: Bank of America earnings leapt 17.5% to 94 cents per share as revenue surged 13.4% to $26.3 billion.

Expectations: Analysts polled by FactSet had expected Bank of America (BAC) earnings to rise 2 cents to 82 cents per share on 8.3% revenue growth to $25.16 billion.

Average deposits fell to $1.91 trillion, down from $1.93 trillion at the end of the year, and down from $2.07 trillion in Q1 2022, respectively.

Net interest income spiked nearly 25% to $14.45 billion. Investment banking revenue crumbled 20% to $1.2 billion, but fared slightly better than FactSet forecasts of $1.02 billion.

Outlook: FactSet analysts project adjusted earnings will rise roughly 5% to $3.39 per share for fiscal 2023 on 5.2% revenue growth to $99.845 billion.

BAC stock gained 2.1%  to 31 premarket Tuesday following results. Shares unraveled nearly 14% over the past three months. Bank of America stock is up more than 15% from a March low, but still down 8.3% this year.

Goldman Sachs

Results: Goldman Sachs earnings slumped 18% to $8.79 per share on a 5% revenue decline to $12.22 billion.

Expectations: Wall Street expected Goldman Sachs (GS) earnings to fall for the fifth quarter in a row, tanking 24% to $8.14 per share while revenue edged 1.3% lower to $12.76 billion.

Investment banking revenue fell 26% to $1.58 billion, slightly higher than the projected decline to $1.2 billion. Net interest income slid 3% over the year to $1.78 billion.

Outlook: Analysts forecast Goldman Sachs full-year earnings will rally 7% to $32.26 per share on 4.2% revenue growth to $49.39 billion.

GS stock weakened 2.8% premarket Tuesday following results, sliding to 330.12. Shares loped 9.2% off its price over the past three months but is only down 1% so far this year.

Bank of New York Mellon

Expectations: FactSet analysts guided Bank of New York Mellon (BK) to report a 30% spike to $1.12 per share as revenue as revenue jumped 12% to $4.4 billion.

Average bank deposits declined over the year, dropping TK% from $313.42 billion in Q1 2022.

Outlook: Bank of New York Mellon earnings are expected to bolt 68.6% to $4.89 per share on 8.3% revenue growth to $17.74 billion.

BK stock retreated 9.8% over the past three months and slumped 2.8% in 2023.

Morgan Stanley

Expectations: Wall Street forecast Morgan Stanley (MS) earnings swoon 18.5% to $1.68 per share while revenue weakens 5.6% to $13.97 billion.

Analysts expect a 10% jump in net interest income to $2.4 billion, erased by the 33% dive in investment banking revenue to $1.13 billion. Analysts project average deposits rise for the second quarter in a row, eking up to $347.7 billion.

Outlook: FactSet predicts Morgan Stanley earnings climb 6% in fiscal 2023 to $6.75 per share. The consensus foresees revenue increasing 4% to $55.87 billion.

MS stock faltered 2.6% over the past three months but is up 5% this year.

U.S. Bancorp

Expectations: Wall Street sees U.S. Bancorp (USB) earnings surging 11% to $1.10 per share. The consensus has revenue rocketing 27.5% to $7.14 billion.

Experts project average bank deposits rise to $515 billion, up only slightly on a quarterly basis but jumping 13% from last year.

Outlook: Analysts project U.S. Bancorp fiscal 2023 earnings rallying nearly 29% to $4.75 per share. Revenue is expected to pop 20% to $29.23 billion.

USB stock tumbled nearly 25% over the past three months and is down 18.4% this year.

You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison

YOU MAY ALSO LIKE:

Bank Stocks And Financial News And Analysis

Join IBD Live Each Morning For Stock Tips Before The Open

IBD Digital: Unlock IBD’s Premium Stock Lists, Tools And Analysis Today

Charles Schwab Stock Rises After Earnings Beat, Pauses Buybacks; M&T Rallies