Bank of America (BOC.US)
Analysts expect a decline in earnings due to reduced investment banking activity and increased reserves as a result of recessionary risks. However, part of the decline may be offset due to interest income, driven by higher interest rates. The stock has lost more than 30% since the beginning of the year:
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Open account Try demo Download mobile app Download mobile appExpected revenues: $23.5 billion
Expected EPS: $0.78
- The bank's strategy appears disciplined and defensive after the 2007 - 2009 crisis, and anlitizens agree that the bank will likely be the one to do better than the banking average. Bank stocks could gain as long as Wall Street expects borrowers to cope with rising liabilities, fueled by a hawkish Federal Reserve. Analysts expect a BofA profit of $6.4 billion.
Charles Schwab (SCHW.US)
Analysts expect mixed results with revenue above consensus but limited margins. The stock has lost about 15% this year:
Expected revenue: $5.41 billion (18% y/y growth)
Expected EPS: $1.05
Annual EPS forecast: $3.85
- The company reported Q2 results above expectations, thanks to a 13% year-over-year increase in net income to $5.1 billion, thanks to 31% higher interest income (interest-earning assets and high interest rates). However, trading income fell 7% overall.
- Total assets as of June 2022 were $6.8 trillion, down 10% annually. Wall Street expects this trend to continue due to weak equity and risk sentiment (just as AUM assets for BlackRock fell as expected). The first half of the year was relatively successful for the company, with revenues rising 6% year-on-year to nearly $9.78 billion.
- A further rise in interest rates with a still relatively strong US economy could still support the company's performance, but a decline in client activity could painfully offset rate hikes and gains from higher asset management fees. Analysts expect about $21 billion in annual profit for Charles Schwab.
Bank of America (BAC.US) shares. The bank's shares have slipped below the 200-session average, which runs at $33 per share, and have halted declines at the 61.8 Fibonacci elimination. The stock is gaining 2.5% ahead of the open. Source: xStation5
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