Factset Inisghts: How Will Financials Sector Start This Earnings Season?
Financials sector will be a focal point for the market.
Notable companies including $Bank of America(BAC)$ , $Citigroup(C)$ , $Goldman Sachs(GS)$, $JPMorgan Chase(JPM)$, $Morgan Stanley(MS)$, and $Wells Fargo(WFC)$, will release earnings on this Friday or next week.
Financial sector is projected to experience a slight year-over-year earnings decline of -0.4%.
Bank industry is expected to decline -12% in earnings, contributing significantly to the overall sector decline. Excluding the Banks industry, it would yield a 6.9% growth rate for Financials.
Among banks, diversified banks will deliver the worst performance, with anticipated earnings decline of -13%. Regional banks will pose earnings growth of less than 1%.
Net interest income may be hindered by sluggish loan growth and near-term headwinds from credit provisioning, especially in commercial real estate (CRE) and credit cards.
In contrast, Capital Markets is expected to have the highest growth at 11%; all sub-industries projected positive growth.
Insurance will grow 9%, with Property & Casualty Insurance leading at 25%.
Financial Services is expected to see growth of 4%, driven by Transaction & Payment Processing Services.
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Despite decline in Q3, analysts predict earnings growth of 39.8% for Q4 2024, 6.0% for Q1 2025, and 1.4% for Q2 2025. The Banks industry is expected to rebound in Q4 2024 due to easier comparisons with Q4 2023, significantly driving overall sector growth.
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