Mostly Upbeat Bank Results as Earnings Begin
PNC disappointed, but we saw positives in JPMorgan, Citi, and undervalued Wells' releases.
Eric Compton: Bank earnings kicked off today, with JPMorgan, Wells Fargo, Citi, and PNC all reporting.
Wells Fargo is currently the most undervalued, as we feel pessimism over past scandals still haunts the name. Primary consumer checking customers were up 1.7% year over year, retention rates for these customers reached a five-year high, and debit and credit card purchase volumes were also both up year over year. We view these as positive signs that Wells' underlying consumer business has not been permanently impaired. If Wells can begin to get past its legal and operating woes, maintain expense discipline, and return to anywhere close to its former profitability, the bank is arguably undervalued at today's prices. We maintained our fair value estimate of $67 per share.
Eric Compton does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.