Q2 Earnings Race Underway; JPM Stock, WFC Turn Mixed
JPMorgan Chase (JPM), Wells Fargo (WFC) and Citigroup (C) rose early Friday after kicking off earnings in an important quarter for banks and other financial issues. JPM stock, WFC and C are all in or near buy zones.
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JPM Stock Climbs On Results
Dow Jones giant JPMorgan posted its fourth straight quarter of earnings and revenue growth Friday morning. Earnings soared 72% to $4.75 per share while net revenue leapt 34% to $42.4 billion. FactSet analysts projected earnings of $3.95 per share on $39.36 billion in revenue.
Excluding the purchase of First Republic, JPMorgan said profit would have jumped 40% while revenue increased 21%.
Net interest income spiked 44% to $21.9 billion, edging out forecasts of $21.14 billion. JPMorgan also raised full-year guidance for net interest income.
The company posted record quarterly revenue of $38.35 billion for its Q1 results in mid-April.
JPM stock pared gains to 0.6% Friday after rising nearly 3% in early trade. JPM stock has been trading in a buy zone for a flat base after surpassing the 143.37 buy point on June 14.
Shares have advanced 11.7% so far this year.
JPMorgan leads the Banks-Money Center IBD industry group, according to IBD Stock Checkup. JPM stock has a 96 Composite Rating out of a best-possible 99. The Composite Rating combines various technical indicators into one easy-to-read score. Shares have a 92 EPS Rating. JPMorgan's relative strength line is off highs from the beginning of the year and has an 84 RS Rating.
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Wells Fargo
Wells Fargo earnings bolted 67% to $1.25 per share in Q2 after two quarters of slowing growth. Revenue growth accelerated for the second straight quarter, surging 20% to $20.53 billion. Analysts expected earnings of $1.17 per share on $20.12 billion in revenue for the quarter.
Net interest income vaulted 29% to $13.16 billion, beating forecasts of $12.83 billion.
WFC stock is trading in a cup base with a 48.84 buy point, according to MarketSmith. Shares could form a handle Wednesday just above the 200-day moving average, which would provide an early entry opportunity around 43.
WFC stock eased 0.3% to 43.58 Friday and swung 3.3% higher premarket. Shares climbed 5.6% year-to-date.
Citigroup
Citigroup earnings tumbled to $1.33 a share with revenue edging down to $19.44 billion. FactSet analysts expected a Q2 EPS of $1.31 on revenue of $19.34 billion.
In Q1, earnings unexpectedly rose after five straight quarters of declines.
Net interest income leapt 16% to $13.9 billion vs. views for a gain of 8.7% to $13 billion.
C stock is trying to find its way out of a long-term consolidation but is still trading below its major technical moving averages.
Citigroup stock retreated 4% Friday and climbed 1% premarket following its report. C shares have gained about 1.2% so far in 2023.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
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Source: Investor's Business Daily
