Calling all major banks for upside targets! Earnings season has so far shown strong to decent bank earnings considering the recent passage of Financial Regulation and considering the end of May to June slowing of the economy. The issue is that the key money-center banks of Bank of America Corporation (NYSE: BAC), Citigroup, Inc. (NYSE: C), J.P. Morgan Chase & Co. (NYSE: JPM), and Wells Fargo & Company (NYSE: WFC) have not really seen a major jump from earnings season and they have not recovered as a whole. We wanted to look through the new post-earnings price targets and 2010 and 2011 earnings estimates from Thomson Reuters to see which could outperform the most.
Bank of America Corporation (NYSE: BAC) is one of the larger pullbacks since its bounce from disgrace in 2009. Shares closed yesterday at $14.15 and the stock reached a low of $13.30 so far this earnings season. With Thomson Reuters earnings estimates of $0.95 EPS for 2010 and $1.56 EPS estimates for 2011, Mr.Vikram & Co. trades at implied 14.9-times 2010 earnings and 9-times 2011 earnings. Analysts have a one-year price objective of roughly $20.40, implying upside to the current price objective of 44%. Its 52-week range is $12.51 to $19.86.
Citigroup, Inc. (NYSE: C) is still the troubled bank of the lot. It is also one we noted in recent weeks as being one of the few stocks that could still double. There is also the “core Citi earnings scenario” to consider as shown by Bill Ackman in his holding disclosure. Shares closed yesterday at $4.15 and the stock reached a low of $3.85 so far this earnings season. With Thomson Reuters earnings estimates of $0.38 EPS for 2010 and $0.46 EPS estimates for 2011, Mr.Vikram & Co. trades at implied 10.9-times 2010 earnings and 9-times 2011 earnings. Analysts have a one-year price objective of roughly $5.33, implying upside to the current price objective of about 28.5%. Its 52-week range is $2.56 to $5.43.
JPMorgan Chase Co. (NYSE: JPM), arguably the best run of the banks back in the meltdown, has also come down considerably from highs. Unfortunately, it stands to lose from some trading restrictions as it was a challenger (and is still) to Goldman Sachs and Morgan Stanley. Shares closed yesterday at $40.33 and the stock reached a low of $38.12 so far this earnings season. With Thomson Reuters earnings estimates of $3.59 EPS for 2010 and $4.61 EPS estimates for 2011, Dimon & Co. trades at implied 11.2-times 2010 earnings and 8.75-times 2011 earnings. Analysts have a one-year price objective of roughly $53.00, implying upside to the current price objective of 31.5%. Its 52-week range is $35.16 to $48.20.
Wells Fargo Company (NYSE: WFC) was actually the basis for this article after noticing how many analysts went very positive on the stock last week after its earnings and after the passing of Fin-Reg. Shares closed yesterday at $27.91 and the stock reached a low of $25.30 so far this earnings season. With Thomson Reuters earnings estimates of $2.04 EPS for 2010 and $2.84 EPS estimates for 2011, Wells Fargo trades at implied 13.6-times 2010 earnings and 9.8-times 2011 earnings. Analysts have a one-year price objective of roughly $36.70, implying upside to the current price objective of 31%. Its 52-week range is $23.38 to $34.25.The target to consensus price targets leaves Bank of America as the winner on a price target, although it has also come off highs considerably. That leaves J.P. Morgan Chase Co. and Wells Fargo in a tie, and leaves Citi as the wild card.
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