As earnings season officially begins next week, several major financial services firms could once again outperform Wall Street’s expectations, potentially driving their share prices higher. In total, 25 companies within the S&P 500 — nearly 5% of the index — are scheduled to release their latest results in the coming week. Leading this reporting round are BlackRock, Morgan Stanley, and Citizens Financial Group.
CNBC Pro analyzed data from Bespoke Investment Group to identify companies with a solid track record of surpassing analysts’ expectations and a tendency to see their shares rise following these beats. The firms selected for the following analysis have exceeded earnings per share estimates at least 75% of the time and average a gain of 1% or more on the first trading day after posting their financials.
Asset manager BlackRock is set to report earnings next Wednesday, releasing third-quarter results before the opening bell on Oct. 14. Historically, the firm has topped analysts’ earnings estimates 82% of the time, with its shares rising an average of 1.1% on the first trading day following results. Wells Fargo recently initiated coverage of BlackRock as overweight, citing a compelling entry point. “BLK is the clear industry leader and a bellwether financial with recently accelerated operational momentum,” Wells Fargo analysts wrote in a note.
Morgan Stanley also reports Wednesday. The bank has beaten Wall Street’s bottom-line estimates 80% of the time, and its shares have gained an average of 1.1% following earnings reports. In July, the firm reported record revenue and profit in the second quarter, powered by a 69% surge in equities trading revenue, while its wealth management division also posted revenue that beat analysts’ expectations. Investors will keep a close watch on how higher rates affect lending, M&A activity, and startup funding.
Other major banks reporting next week include JPMorgan Chase, Goldman Sachs, Citigroup, and Wells Fargo — all of which will report Oct. 13.