Yahoo Finance Zacks Investment Ideas feature highlights: Citigroup and JPMorgan Chase
For Immediate Release
Chicago, IL – July 11, 2024 – Today, Zacks Investment Ideas feature highlights Citigroup C and JPMorgan Chase JPM.
JPMorgan, Citi Stage Breakouts Ahead of Q2 Earnings Friday
When it comes to stock market movements, earnings are the ultimate driver.
The second-quarter earnings season unofficially kicks off this week. Early reports have already begun to trickle in, with the focus now turning to the major bank results on Friday.
The setup heading into the season is favorable; S&P 500 earnings are projected to grow 8.6% from the year-ago period on 4.7% higher revenues. That would mark the highest EPS growth rate in about two years. The theme of accelerating earnings growth and continued resilience that we’ve seen in recent periods appears likely to have persisted during the latest quarter.
Another favorable development is the revisions trend, as estimates for Q2 earnings have remained fairly steady leading into the results. In fact, estimates for S&P 500 EPS fell by the least amount when compared to the same timeframe during the latest quarters. In other words, analysts haven’t drifted too far from their projections.
For the most part, financial stocks have fared well in 2024. In terms of the broader Zacks Finance sector, earnings in the second quarter are expected to have risen 9% year-over-year on 5.8% higher revenues, which follows the 11.8% earnings growth (+7.3% higher revenues) during the first quarter.
Digging a bit deeper, the Zacks Banks – Major Regional industry group has more than held its own, slightly outperforming thus far this year.
Despite the impressive performance, stocks in this industry remain attractive from a valuation standpoint.
Big Banks Breakout Ahead of Earnings Announcements
Citigroup hit a 52-week high during Wednesday’s session, a good sign leading up to the bank’s second-quarter results. Adding to the bullish theme, the company surpassed earnings estimates in each of the past six quarters. Citigroup has delivered a trailing four-quarter average earnings beat in excess of 20%.
Citi shares have risen more than 30% this year.
Estimates for the second quarter have declined slightly over the past few months. Analysts now expect Citi to post earnings of $1.40/share, translating to a 2.19% improvement versus the same quarter last year. Revenues are projected to increase 2.77% to $19.97 billion.
Megabank JPMorgan Chase is also rallying ahead of its Q2 announcement. The stock touched an all-time high yesterday before paring some of the gains. The company has exceeded the earnings mark in each of the last seven quarters. JPM stock has rewarded investors with a 25% return so far in 2024.
Analysts have increased their Q2 EPS estimates for JPM by 2.44% in the past 60 days to $4.19/share, which would reflect a 4.12% decline relative to the year-ago period.
What the Zacks Model Unveils
The Zacks Earnings ESP (Expected Surprise Prediction) seeks to find companies that have recently seen positive earnings estimate revision activity. The idea is that this recent information can serve as a more accurate predictor of the future, which can give investors a leg up during earnings season.
The technique has proven to be quite useful in finding positive surprises. In fact, when combining a Zacks Rank #3 or better with a positive Earnings ESP, stocks delivered a positive surprise 70% of the time according to our 10-year back test.
JPM stock is a Zacks Rank #3 (Hold) and boasts a +0.57% Earnings ESP. Another beat may be in the cards when the company reports ahead of the opening bell on Friday morning.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
Citigroup Inc. (C) : Free Stock Analysis Report
