Q4 season kicks off with Delta Air Lines and major banks like BlackRock, Citigroup, Wells Fargo and JPMorgan

0

Tuesday (January 11)

Wednesday (January 12)

Thursday (January 13)

IN THE SPOTLIGHT: DELTA AIR LINES

Delta Air Lines, a major player in the US aviation industry, is expected to post fourth-quarter earnings per share (EPS) of $ 0.11, more than double the loss whopping $ -2.53 per share seen in the same period a year ago.

The airline, which provides scheduled air transportation for passengers and cargo across the United States and around the world, is expected to report revenue growth of more than 130% to about $ 9.2 billion. It should be noted that in the past two years, the airline has exceeded consensus earnings estimates only four times.

According to ZACKS Research, on the basis of strong passenger demand during the holidays, Delta Air Lines raised its forecast for the fourth quarter of 2021. It hopes to achieve “significant” profitability in 2022 despite the problems induced by Omicron. In the December quarter, the airline expects to earn adjusted pre-tax profit of about $ 200 million, according to an SEC filing.

Compared to the same period last year, Delta expects to recover 74% of its total adjusted revenue (excluding third-party refinery sales) in the fourth quarter. In 2022, DAL expects its capacity to reach around 90% of its level in 2019. In 2023 and beyond, it expects to reach pre-pandemic capacity levels. With adjusted revenue (excluding refinery) exceeding $ 50 billion in 2024, the company expects earnings per share to exceed $ 7, ZACKS analysts noted.

” Management. laid out a plan to meet and exceed pre-pandemic financial benchmarks by 2024 by building a top-notch premium airline. The plan is sound and the targets appear cautious although the short-term trajectory remains out of management’s control. We see the line of fire doubling from here, ”noted Ravi Shanker, equity analyst at Morgan Stanley.

“Why overweight? Delta Air Lines (DAL) has some of the highest customer satisfaction ratings among other Legacy peers, while also commanding a higher PRASM, making it our preferred Legacy carrier. While DAL cannot escape legacy overhangs (international / corporate recovery delayed, balance sheet strained), it is expected to rise with the tide of industry. The risk-reward ratio looks attractive.

CHECK OUR WINNING CALENDAR FOR FULL JANUARY 13 RELEASES

Friday (January 14)

SPOTLIGHT: BLACKROCK, CITIGROUP, JPMORGAN, WELLS FARGO

BLACK ROCK: The world’s largest asset manager is expected to report fourth quarter earnings of $ 10.14 per share, down about 0.4% year-over-year from 10.18 $ per share for the same period a year ago.

The New York-based multinational investment management firm is said to report revenue growth of nearly 15% to around $ 5.15 billion. The company has been able to beat earnings per share (EPS) estimates most of the time over the past two years.

“We believe BlackRock (BLK) is best positioned on the asset management bar given the leading iShares ETF platform, multi-assets and alts combined with tech / Aladdin offerings expected to generate ~ 11% EPS CAGR (2020-23rd) via ~ 6% on average Organic growth LT, ”noted Michael Cyprys, equity analyst at Morgan Stanley.

“We anticipate further growth to come for Alts, iShares, international penetration and the institutional market in the United States. Recently acquired Aperio also strengthens the solutions offering and organic growth. We expect the premium to widen as BLK takes part in the evolution of the industry and strives to improve the organic revenue growth trajectory. “

CITIZEN GROUP: The New York-based investment bank is expected to report fourth-quarter earnings of $ 1.87 per share, down about 10% year-over-year from $ 2.07 per share. share at the same time a year ago. But the third largest US banking institution would post revenue growth of nearly 4% to $ 17.06 billion.

“While the stock is cheap at 0.6x NTM BVPS and the new CEO takes strong and proactive strategic steps to drive returns closer to his peers, we believe these actions will take time to materialize,” noted Betsy Graseck, equity analyst at Morgan Stanley. .

“Citi is pulling out of 13 consumer businesses in Asia and the EMEA region, and is focusing on the fastest growing areas of US consumer, Asia WM, international wholesale and consumer payments. These actions could lead to an ROE above the 9% we model for 2023, but we expect the action to start to fully reflect this only when revenues start to accelerate. Citi benefits less than its peers from higher rates, and we expect some of our more rate-sensitive stocks to outperform as the Fed begins to hike rates next year. “

JP MORGAN: The leading global financial services company with assets of over $ 2 trillion is expected to report fourth-quarter earnings of $ 2.94 per share, down more than 20% year-on-year from the 3 , $ 79 per share recorded in the same period a year ago. . But one of the world’s oldest, largest and best-known financial institutions is reportedly posting revenue growth of just over 2% to $ 29.9 billion.

WELLS FARGO: The fourth U.S. lender is expected to post fourth quarter earnings of $ 1.11 per share, which is more than 70% annual growth from $ 0.64 per share in the same period a year ago. The multinational financial services firm based in San Francisco, Calif., Is reportedly posting revenue growth of more than 4% to $ 18.8 billion.

“Wells Fargo (WFC) profits EPS from the highest rate hike in the group, with each roughly 50 basis point increase in FF resulting in an approximately 15% increase in EPS; 50bp long rates generate around 7% of EPS WFC is in a good position to monetize higher rates as cash is 15% of productive assets, 7% above pre-pandemic levels, ”noted Betsy Graseck, equity analyst at Morgan Stanley.

“WFC is taking steps to restructure its business portfolio as it strives to break out of the Fed’s consent order / asset cap and reduce its spending base. Excess capital at Wells stands at 10% of market cap compared to 5% for the mid-to-large-cap bank, allowing a net redemption yield of 10% in 2022 and a total cash return of 12%. Risks associated with the timing of the removal of the asset cap and other regulatory measures remain. “

CHECK OUR WINNING CALENDAR FOR FULL JANUARY 14 RELEASES

Share.

Comments are closed.