We think a base case of “no more cuts for now” seems very reasonable.
We do not plan to make material changes to our fair value estimate for the narrow-moat financial services firm.
We are lowering our fair value estimate for the wide-moat firm.
The wide-moat firm had a solid third quarter, and we are increasing our fair value estimate to $114.
We still view at least one or two more cuts over the next year as the most likely outcome.
We are incorporating three rate cuts (including this one) through 2020 into our bank forecasts.
The release put slowing household spending in the spotlight, supporting the case that the economic picture remains mixed.
Profitability is improving, but growth isn't perfect yet.
We have maintained our underlying rate hike assumptions for our U.S. banking coverage, which includes no rate hikes in 2019.
We believe the U.S. banking system is much stronger and more stable than it was a decade ago.
The move would create a superregional with roughly $442 billion in assets, the sixth-largest U.S.-based bank.
Expenses are declining and sentiment is improving.
As expected, the Fed didn't raise rates today, and we see signs the central bank has taken a significantly more dovish turn.
We still believe the wide-moat bank has meaningful room to improve returns on equity, but it will be a bumpy ride as the bank remains under the regulatory microscope.
The narrow-moat bank is and has been firing on all cylinders.
Despite only marginal revenue growth, expenses were well-managed and allowed the bank's efficiency ratio and overall profitability to improve.
The bank is currently trading at one of the highest risk adjusted discounts to our fair value estimate among the U.S. money center and regional banks.
The Fed raised its target rate range to 2.25%-2.5% but took a more dovish tone with future hikes.
Superb credit quality and declining expenses led to a solid quarter for the narrow-moat bank.
As legal issues fade, operating losses are down, and we are maintaining our fair value estimate for the wide-moat firm.
We’re raising our fair value estimate for the narrow-moat bank after the third-quarter earnings shows the firm firing on all cylinders.
The move to raise interest rates was expected, and we see no change to our long-term rate projections.
Nothing in the results materially changes our valuations.
We are maintaining our fair value estimate for the narrow-moat firm.
The bank is still looking to regain its footing, but the pessimism surrounding the stock is an opportunity for investors.
We are maintaining our fair value estimate for the firm after solid second-quarter results.
Though a few banks ran into issues, the overall restrictions imposed by the Fed will not be that significant.
Although all 35 major banks passed, results were on average worse than last year.
The regulatory relief fits our previous outlook and won’t materially change our bank valuations.
While we expect fee growth to moderate over the longer term, the wide-moat firm should hit a return on equity just over 16% longer term, post tax reform.
Wells Fargo is still the standout in the sector.
Key themes from the Barclays Global Financial Services Conference include continued efforts to improve operating efficiency and increasing capital returns to shareholders.