Goldman Sachs, Morgan Stanley have earnings momentum and are reporting this week. There are others
Goldman Sachs and Morgan Stanley are among a group of financial stocks reporting earnings this week that have seen analysts hike their estimates sharply in recent months. The third-quarter earnings season that kicks off this week is led by major U.S. financial institutions and banks. A total of 25 S & P 500 companies are scheduled to report results this week, according to data from FactSet. Wall Street analysts have raised profit forecasts for several companies ahead of the quarterly updates and, for many, still see further upside for their stocks in the coming year. CNBC Pro screened FactSet data for S & P 500 companies reporting this week that have seen accelerating earnings momentum and may offer appreciation potential. Stocks in the table below had to meet the following criteria: Consensus EPS estimates have risen at least 30% in the past three- and six month periods Average price targets that offer upside of 15% or more Goldman Sachs made the list. The investment bank showed the strongest earnings momentum in the group after Wall Street analysts raised Goldman’s consensus EPS estimate by more than 300% over the past three months, and 59% over the past six months. In the latest three months, Goldman benefited from completing SpaceX’s record-breaking IPO in June. In September, Goldman emerged as the leading bidder for Palmer Square Capital Management, according to Bloomberg . Palmer Square oversees some $37 billion in assets. Also last month, Goldman reportedly discussed replacing CEO David Solomon, 64, with president John Waldron, 57, as early as next year. Analysts currently expect Goldman to earn $13.07 a share in the September quarter, according to FactSet data, with the Street’s average price target implying upside of 18% over the next 12 months. Goldman is scheduled to report third-quarter results on Tuesday. Morgan Stanley has also seen analysts raise their profit expectations lately. The consensus EPS estimate has soared 144% over the past three months and 73% in the past six. Analysts expect Morgan Stanley will earn $2.94 per share, while the average price target would translate into roughly 15% upside. For Morgan Stanley, investors will be watching strength in merger and acquisition advisory profits, as well as how the backup in bond yields that began in late August may affect lending, M & A activity and startup funding. In July , the investment bank reported record revenue and profit for the second quarter, powered by a 69% surge in equities trading revenue. Revenue at Morgan Stanley’s wealth management division also beat analysts’ expectations in the period Morgan Stanley is scheduled to report Wednesday. Many of the country’s largest banks, from Citigroup to JPMorgan Chase , Bank of America and Wells Fargo , are also slated to report and have seen Wall Street grow more bullish on their earnings potential. — CNBC’s Christopher Hayes contributed to this report.
