Oppenheimer Warns of Tough Earnings Season Ahead for Big US Banks
Oppenheimer, a US investment bank, has warned clients that the September-quarter earnings season may be challenging for big US banks. In a recent note, Oppenheimer analysts Chris Kotowski and John Coffey stated that dealmaking revenue is weaker than expected, which could impact earnings per share (EPS) forecasts.
The analysts cut EPS forecasts for Goldman Sachs, Morgan Stanley, Bank of America, Citigroup, and US Bancorp, while nudging JPMorgan Chase higher. Oppenheimer now expects only JPMorgan to beat the average Wall Street estimate, with Wells Fargo matching it.
The key detail is that Oppenheimer reduced its investment-banking revenue view by 9.5% in aggregate but lifted trading revenue guidance by 6%. This suggests that markets desks can hold up even when deal pipeline is slow, but leaves banks most dependent on deal fees more exposed to disappointment.