Goldman, Morgan Stanley, Alcoa On Tap This Week As Q4 Earnings Picks Up Pace: Fund Manager Tells Why 2024 Guidance Is 'Much More Important'

The fourth-quarter reporting season kicked off with earnings releases from major banks last Friday, delivering less-than-optimistic news and casting a shadow on profit growth prospects.

The Season So Far: As of now, 6% of S&P 500 companies have reported earnings. According to FactSet’s latest weekly Earnings Insight report, 76% of them reported positive earnings surprises, and 55% reported revenue exceeding estimates.

JPMorgan Chase & Co. JPM reported a revenue beat but faced earnings pressure due to costs linked to regional bank bailouts. Despite reaching a record annual revenue in 2023, Bank of America Corp. BAC missed revenue expectations.

UnitedHealth Group, Inc. UNH experienced a share pullback due to concerns over higher medical costs, and Delta Air Lines, Inc. DAL witnessed a significant drop on Friday following disappointing guidance.

Earnings Drop Looms? Projections indicate a potential negative 0.1% blended year-over-year earnings growth for S&P 500 companies, marking a potential negative profit growth for the fourth time in the past five quarters, according to FactSet. Four S&P 500 companies have issued below-consensus earnings per share guidance, while three anticipate results above consensus.

Fund manager Louis Navellier sees the forward outlook as more important than the December-quarter earnings. “Guidance for ’24 will be much more important than 4Q23 results with current valuations counting on double-digit earnings growth and multiple cuts by the Fed,” he said.

While noting that the stock market has got off to a negative start this year, he said, “All it will take is a couple of days of positive earnings results and guidance to get back on track.”

See Also: Best Bank Stocks

Key Earnings To Watch This Week:

• Tuesday: Goldman Sachs Group, Inc. GS, Morgan Stanley MS and PNC Financial Services Group, Inc. PNC are scheduled to report ahead of the market open. Goldman is expected to report nearly flat bottom-line results and a modest revenue drop, while Morgan Stanley’s top as well as bottom line are expected to decline on a year-over-year basis. Higher interest rates may have propped up the net interest income of banks, and after a lull, deal-making, initial public offering, corporate advisory activities, etc. picked up pace in the fourth quarter. Interactive Brokers Group, Inc. IBKR and Progress Software Corp. PRGS are due after the market closes.
• Wednesday: Charles Schwab Corp. SCHW and US Bancorp. USB are expected to report before the market opens. Alcoa, Inc. AA, Discover Financial Services DFS, and energy pipeline transportation company Kinder Morgan KMI will report after the market closes.
• Thursday: Among those reporting before the market opens are industrial distribution company Fastenal Co. FAST as well as regional banks First Horizon Corp. (FHN), and KeyCorp. KEY, M&T Bank Corp. NTB and Northern Trust Corp. NTRS. Those reporting after the close are road transportation company J.B. Hunt Transport Services, Inc. JBHT and specialty chemicals company PPG Industries, Inc. PPG.
• Friday: Another slew of regional banks, including Comerica, Inc. CMA, Fifth Third Bancorp. FITB, Regions Financial Corp. RF, and State Street Corp. STT are due to report ahead of the market opening. Also reporting on Friday are oilfield services company SLB Limited SLB and insurer Travelers Companies, Inc. TRV.

The SPDR S&P 500 ETF Trust SPY closed at $476.68, up 0.07% , according to data from Benzinga Pro.

Read Next: Goldman Sachs Q4 Earnings Preview: Financial Strengths And Analyst Predictions

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