A snapshot of the six big U.S. banks' results:
JPMorgan Chase & CoAdj. EPS (beat) - $1.76 vs est $1.69Revenue (beat) - $25.45 bln vs est $25.15 blnHelped by: Interest incomeHurt by: Slowdown in trading revenueTax impact: $2.4 bln chargeExecutive comment: "The enactment of tax reform in the fourth quarter is a significant positive outcome for the country. U.S. companies will be more competitive globally, which will ultimately benefit all Americans" - CEO Jamie DimonAnalyst's take: Credit Suisse - (rating: "outperform," PT: $120) JPM's Q4 print is noisy, but generally consistent with expectations; adds JPM is well positioned in 2018Nomura - (rating: "neutral," PT: $115) Despite JPM's messy quarter/expense miss, FY18 tax guidance is slightly better than anticipated. While JPM shares have lagged the KBW Bank Index to start the year, shares could outperform, given favorable tax guidance RBC - (rating: "outperform," PT: $110) JPM's Q4 core performance was generally steady with continued improvement in net interest margin and lower-than-expected credit costsCompass Point - (rating: "sell," PT: $100) Metrics in JPM's Q4 results were mixed, but largely disappointingWells Fargo & CoEPS – $1.16Rev – $22.1 blnTax impact - $3.35 bln gainHelped by - One-time gain related to the new tax lawHurt by - Higher-than-expected non-interest expenses for 2017; $58.48 bln vs est $54.62 blnExecutive comment: "The only piece of that pro-growth agenda people can really sink their teeth into is that tax reform that just occurred ... I see a lot to like in it" CEO Tim SloanAnalyst's take: RBC - (rating: "outperform," PT: $60) Although there were many moving parts in WFC's Q4, overall revenue performance was underwhelming and suggests co has yet to fully move past its sales practice issuesBarclays - (rating: "overweight," PT: $75) WFC's 2018 expense guidance was "okay" ($53.5 bln-$54.5 bln vs. consensus at $53.7 bln)BMO - (rating: "market perform" PT: $62) Despite WFC's 6 pct cost-driven Q4 miss, its forward estimates are essentially unchanged; broker remains bullish on banksEvercore - (rating: "outperform," PT: $65) WFC's expectations for 2018 expenses in a range of $53.5 bln-$54.5 bln is positively below its estimate of $55 blnCitigroup IncAdj. EPS (beat) - $1.28 vs est $1.19Rev (beat) - $17.26 bln vs est $ 17.22 blnTax impact - $22 bln chargeHelped by - Growth in consumer banking, especially in Asia and MexicoHurt by – Charges related to the new U.S. tax lawExecutive comment: "Tax reform is a clear net positive for Citi and its shareholders," - CEO Michael CorbatAnalysts' take:Credit Suisse - (rating: "outperform", PT: $86) Citi's Q4 results "solid" relative to expectations, where fundamentals were just fine with revenue modestly above forecast in the Global Consumer Banking segmentInstinet - (rating: "buy", PT: $86) Despite mixed results overall, sees modest share outperformance given low expectations for Q4 2017 and better-than-expected Consumer credit trends. While tax guidance did not surprise and capital hit was slightly greater than anticipated, results prove "good enough" this quarterRBC - (ratings: "outperform," PT: $79) Although significant non-cash charges related to tax reform obfuscated Q4 performance, underlying trends were generally "strong" and core results exceeded estimatesBernstein - (rating: "outperform," PT: $84) Citi reported a messy Q4 results but its core trends came in a touch better. Modest upward inflection in Global Consumer growth (Mexico better) was a positive for Q4Bank of America CorpAdj. EPS (beat) - 47 cents vs est. 44 centsRev (miss) - $20.4 bln vs est. $21.53 blnTax impact - $2.9 bln chargeHelped by - 11 percent rise in net interest income to $11.46 billionHurt by - Tax-related charges, lower trading revenue compared with a year earlier, $292 million charge related to troubled South African furniture retailer Steinhoff InternationalExecutive comment: Some tax savings would be funneled into technology investments but the bulk of the windfall would be returned to investors - CEO Brian MoynihanAnalysts' take:Moody's analyst David Fanger - We consider BAC's results to be credit positive and consistentGoldman Sachs Group IncAdj. EPS (beat)- $5.68 vs est. $4.91Rev (beat)- $7.83 bln vs est. $7.61 blnTax impact - $4.4 bln chargeHelped by: Investment banking revenue due to strong debt and equity underwritingHurt by: One-time charge related to the U.S. tax overhaul, a slump in trading revenueExecutive comment: "We are working intensely to achieve our $5 billion in strategic growth initiatives with an emphasis on growing earnings and returns" - CFO Marty ChavezAnalyst's take: Credit Suisse - (rating: "neutral," PT: $267) GS' earnings were a mix of positives and negatives with investment banking and investing & lending both stronger and more than offsetting weakness in tradingInstinet - (rating: "neutral," PT: $238) Investment bank results surprised "positively". However disappointment on trading/continued share loss, coupled with lower-quality sources of earnings strength will result in share underperformanceJPMorgan - (rating: "overweight," PT: $278) GS' overall trading results disappointing, mainly in fixed income, currency and commodities client execution, even in light of known low volatility levels. Expects GS to operate with headwinds in Q1 (like Q4) compared to peers due to its business and client mixJMP - (rating: "market perform") GS' core results were modestly better than expectation but not close to the magnitude of the headline beatMorgan StanleyAdj. EPS (beat)- 84 cents vs est. 77 centsRev (beat)- $9.5 bln vs est. $9.2 blnTax impact - $1.2 billion chargeHelped by: Underwriting revenue; Wealth managementHurt by: Tax provision; Trading revenueExecutive comment: Morgan Stanley has met or exceeded all the goals laid out in early 2016 - CEO James GormanMorgan Stanley's bond trading revenue plunged 45 percent in the quarter, the business still delivered more than $1 billion in average quarterly revenue for the full year. Gorman has said the business needs to generate at least that much to be sustainable.Analyst's take: Argus Research - Investments in wealth management business and favorable equity market are helping MS lower earnings volatility, which should aid stock's valuation over timeCredit Suisse - (rating: "outperform," PT: $59) MS reported "solidly positive" Q4 results. MS' medium-term targets and 2018/2019 financial targets, which include wealth management pre-tax margin of 26-28 pct and expense efficiency ratio of Compass Point - (rating: "sell," PT: $49) MS' reported a "beat" on both top and bottom line, driven by gains in investment banking and wealth management businessesNomura - (rating: "buy," PT: $64) Despite some pockets of revenue weakness, Q4 results showed key tenets of MS bull case. In the backdrop of difficult trading, MS' results are impressive and expect strategic review to reinforce the bull case (Compiled by Diptendu Lahiri in Bengaluru; Edited by Maju Samuel)