What the Good News About Top Bank Stocks Means for Your Portfolio

Chase, Citi and other banks' earnings reports look good.


Rising interest rates have beaten up stocks over the past few days, and the earnings reports of banks are being closely watched for clues as to whether this is a one-time blip or the start of a longer decline.

Banking giants like Citigroup, JPMorgan Chase and Wells Fargo released their third-quarter earnings reports Oct. 12, 2018, and Bank of America will release its report on Oct. 15.

Two of the big banks that reported earnings before the bell on Friday exceeded revenue expectations, a good sign for the general market. Three of the five banks covered here also saw their stock prices rise by closing time on Oct. 12, which was in line with the overall stock market performance after recent drops.

Click to check out the best bank stocks for investors.

Citigroup Earnings and Stock

Citigroup reported earnings of $1.73 per share, higher than analysts’ estimates of $1.69. Revenue was $18.389 billion, compared to estimates of $18.501 billion.

The stock is up over 6 percent since the last earnings report in July and, as of close on Oct. 12, 2018, it went up 2.14 percent for the day. Citigroup CEO Michael Corbat has promised to control costs while increasing revenue, and it seems to be working.

JPMorgan Chase Earnings and Stock 

JPMorgan Chase reported third-quarter earnings per share of $2.34, higher than the $2.26 analysts expected. Revenue was $27.82 billion, also higher than the $27.4 billion that analysts expected.

CEO Jamie Dimon expressed his short-term optimism and longer-term caution in a statement: “The U.S. and the global economy continue to show strength, despite increasing economic and geopolitical uncertainties, which at some point in the future may have negative effects on the economy.”

JPM stock did fall on Oct. 12, 2018, down 1.09 percent for the day at closing time. The consensus recommendation among analysts for JPMorgan Chase stock is a buy, with seven analysts rating the stock a strong buy, one analyst rating it a buy, and seven rating it a hold.

Read: How Do Political Conditions Affect the Stock Market? 

PNC Earnings and Stock

PNC reported third-quarter earnings per share of $2.82, up from $2.16 in the same quarter last year. This was 10 cents per share higher than analysts’ estimates. Revenue was up 5.6 percent from last year to $4.36 billion.

The stock dropped on Oct. 12, 2018, by 5.58 percent at closing time. However, PNC has been rated a strong buy by six analysts and a hold by 10.

Wells Fargo Earnings and Stock

Wells Fargo didn’t fare as well, reporting earnings per share of $1.16, less than the estimate of $1.17 per share. Revenue was $21.9 billion, slightly more than analysts’ expectations of $21.89 billion.

Wells Fargo stock was up 1.30 percent on Oct. 12 at closing time. Analysts disagree on Wells Fargo’s potential compared to other big banks. Ten analysts rate it a strong buy, and one rates it a buy. Nine recommend holding, and three suggest that owners of Wells Fargo stock sell.

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Bank of America Earnings and Stock

Bank of America will report third-quarter earnings on Oct. 15. The consensus among analysts is that the company will report earnings per share of $0.62. Bank of America’s stock went up on Oct. 12, closing 0.35 percent higher than it opened. Four analysts have revised their estimates downward in the past four weeks.

No one has a crystal ball when it comes to investing. But positive results from the big banks could be a positive sign for your portfolio.

Click through to read about what you should do in a falling stock market.

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