For Immediate Release
Chicago, IL – September 19, 2016 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Wells Fargo & Company (NYSE:WFC) (WFC), JPMorgan Chase & Co (NYSE:JPM). ( JPM), U.S. Bancorp (USB), Bank of America Corporation (NYSE:BAC) (BAC) and Citigroup Inc (NYSE:C). (C).
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Here are highlights from Friday’s Analyst Blog:
Bank Stock Roundup: Wells Fargo Scam Dominates Headlines; BofA, Citi Upbeat on Q3 Market Revenue
Over the last five trading days, major bank stocks remained under pressure. Among the major negatives that kept investors away from bank stocks, Wells Fargo & Company’s (WFC) alleged unauthorized account opening scam dominated the headlines. The company lost its status of being the largest U.S. bank based on market capitalization to JPMorgan Chase & Co. ( JPM).
Moreover, a challenging operating backdrop and persistent low-rate environment has led banks to lower their long-term targets.
Nonetheless, guidance from a few banks indicate that banks will see better investment banking and trading revenues in third-quarter 2016. Gradual market stability across the globe, marginal rebound in oil prices and the chances of another rate hike soon are the primary reasons for an upbeat outlook.
Moreover, banks continue to restructure operations with an aim to focus on core businesses and improve efficiency. Further, resolution of litigations and probes related to legacy matters and business misconducts dominated the banking space, as usual.
(Read: Bank Stock Roundup for the week ending Aug 26, 2016)
Important News of the Week
1. The resolution of unauthorized account opening allegations did not end the matter for Wells Fargo. Though a $190-million fine by the Consumer Financial Protection Bureau (CFPB) will have no material impact on the company’s financials, it has come under fire from several quarters. The fine has led to a significant embarrassment for the company as its reputation is expected to see some damage, according to Moody’s Investors Service. Additionally, Wells Fargo's chief executive – John Stumpf – has been summoned to appear before the Senate Banking Committee to answer questions about the bank's sales practices (read more: Wells Fargo Facing Repercussions of $190M Fine from CFPB ).
2. At its Investors Day conference in New York, U.S. Bancorp (USB) lowered its long-term financial targets in the wake of persistent global turmoil and a continued low interest rate environment. The company's net income is now anticipated to grow at 6–8%, lower than the previous guidance of 7–9%. Nonetheless, earnings growth rate is projected to remain in the 8–10% range (read more: U.S. Bancorp Lowered Outlook Amid Global Turmoil)
3. Bank of America Corporation (BAC) is witnessing an uptick in investment banking fees in third-quarter 2016. This was disclosed by Christian Meissner – head of global corporate and investment-banking business – at an investor conference in New York sponsored by Barclays (LON:BARC) PLC. Recovering oil prices and stabilizing market conditions are the primary reasons for the reversal in the investment banking scenario (read more: BofA's Investment Banking Fees Trending Up In Q3 ).
4. Similar to BofA, Citigroup Inc. (C) also came up with its expectation for trading revenue at the same investor conference. The bank expects to see a mid-single-digit rise in trading revenues in third-quarter 2016 on a year-over-year basis. The growth will be driven by strength in fixed income and currencies (read more: Citigroup Projects Trading Revenue to Improve in Q3 ).
5. Wells Fargo has agreed to sell Wells Fargo Global Fund Services (GFS) – its fund administration business – to SS&C Technologies Holdings, Inc. The transaction awaits regulatory approvals and is expected to close in fourth-quarter 2016. The terms of the deal remain undisclosed (read more: Wells Fargo to Sell its Fund Administration Unit ).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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WELLS FARGO-NEW (WFC): Free Stock Analysis Report
BANK OF AMER CP (BAC): Free Stock Analysis Report
JPMORGAN CHASE (JPM): Free Stock Analysis Report
US BANCORP (USB): Free Stock Analysis Report
CITIGROUP INC (C): Free Stock Analysis Report
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