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The Week Ahead: Earnings Season Kicks Off With Big Banks

Jan 12, 2019

The Week Ahead: Earnings Season Kicks Off With Big Banks

Jeremy Glaser: Earnings season kicks off this week, and investors will be scrutinizing results for any signs of an economic slowdown.

The big banks will likely be the highlight with Citi, JP Morgan, Wells Fargo, and Bank of America on tap. Global banks have fallen over 10% of the last three months as moderating rate expectations have weighed. Our equity analyst team thinks that this has created some opportunities, with over half of our banking coverage is now trading in 4- or 5-star territory. This includes Citi, which analyst Eric Compton think is trading at a 27% discount to his fair value estimate.

BlackRock reports this week as well. Analyst Gregg Warren thinks shares of the wide-moat asset manager are undervalued today. Other financial services firms reporting includeAmerican Express, Goldman Sachs, Morgan Stanley, PNC, and US Bank.

Netflix shares got hit hard during the sell-off but have bounced back in recent trading. Still, even at its lowest levels analyst Neil Macker saw the firm as significantly overvalued. He expects them to face increasing completion in the years to come, which will lead to ongoing cash burn and depressed margins.

Retail sales and housing data is due next week, but may not be released due to the government shutdown.

Stay tuned for our take on these stories.

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