The downward trend is taking a break as a new week starts, thanks mainly to better-than-expected earnings reports from several large banks. After several banks, including Wells Fargo (NYSE: WFC) and JPMorgan Chase (NYSE: JPM), reported mixed earnings on Friday, analysts did not have a great deal of faith in the earnings for Monday’s reporters, including Bank of America (NYSE: BAC) and Bank of New York Mellon (NYSE: BK).
Fortunately for investors, those analysts turned out to be wrong. Bank of America was expected to report an 8.2% decrease in EPS and a 3.4% increase in revenue; the bank wrote a 4.7% decrease in EPS and a 7.5% increase in revenues. The unexpected beat came from higher interest rates and double-digit loan growth; net income fell due to lower service charges and a slowdown in investment banking.
Source: CNBC Television YouTube
Much like Bank of America, Bank of New York Mellon beat on both the top and bottom lines. BofA’s $4.28 billion in revenues eked out a beat over estimates of $4.2 billion, while their EPS of $1.21 handily beat the $1.10 estimate. The revenue beat came from rising interest rates and growing securities/market services; net interest revenue rose 44%, while security services and wealth services increased 13% and 17%, respectively.
Investors took the results as a positive, which drove the indexes higher. The Dow Jones, S&P 500 and NASDAQ gained 1.86%, 2.65% and 3.43%, respectively. As we enter earnings seasons and more companies begin to report, we’ll get an idea of whether these banks are the exception to the rule or if the economy as a whole is improving.
Shares of Bank of America closed trading today at $34.88 per share, up +3.73% on the day. YTD, BAC stock is down -24.47%.
Learn more about Bank of America: Website | Investor Deck | BAC Chart
Shares of Bank of New York Mellon last traded at $39.96 per share, down -0.99% on the day. YTD, BK stock is down -31.70%.
Learn more about Bank of New York Mellon: Website | Investor Deck | BK Chart
* Attention readers on mobile or tablet, if you cannot view the above chart entirely, please rotate your device sideways. Make sure you have your portrait orientation lock switched off.
Read More:
Follow Wealthy VC on Social Media: Facebook | Instagram | Twitter | LinkedIn | GETTR | Tumblr
????Join the Discussion in the Wealthy VC Investor Group
????Have a Stock Tip or New Story Suggestion? Email us at Invest@WealthyVC.com
Disclaimer: Wealthy VC does not hold a long or short position in any of the stocks mentioned in this article.
