While the new earnings season gets started with three firms reporting Thursday morning, the first big drop comes Friday morning when four financial giants and the country’s largest health insurer report results for the September quarter.
Before U.S. markets open on Thursday, Commercial Metals, Delta Air Lines, and Walgreens will report quarterly results.
There were no notable earnings reports on Wednesday morning.
BlackRock
The world’s largest investment management firm, BlackRock Inc. (NYSE: BLK), reportedly had assets under management totaling around $9.4 trillion at the end of the second quarter. The stock’s price has risen by nearly 18% over the past 12 months, although shares have lost about 9.4% since January.
BlackRock and many others await an SEC decision on applications to launch a spot Bitcoin ETF. Meanwhile, the firm partnered with JPMorgan to tokenize shares of one of BlackRock’s money market funds. Using its own and JPMorgan’s blockchains, BlackRock transferred the shares to Barclays, where they were used as collateral in an over-the-counter derivatives trade. This was the first-ever blockchain-based collateral settlement transaction, according to CoinDesk.
Analysts remain bullish on BlackRock, with 13 of 16 having a Buy or Strong Buy rating. The rest rate the stock at Hold. At a recent price of around $642.00 a share, the upside potential based on a median price target of $754.00 is about 17.4%. At the high price target of $880.00, the upside potential is 37.1%.
Third-quarter 2023 revenue is forecast at $4.56 billion, up by 2.2% sequentially and by 5.8% year over year. Adjusted earnings per share (EPS) are forecast at $8.42, down 9.3% sequentially and 11.8% lower year over year. For the full fiscal year, analysts anticipate EPS of $34.89, down about 1.3%, on sales of $118.98 billion, up 0.6%.
BlackRock stock trades at 18.4 times expected 2023 EPS, 16.5 times estimated 2024 earnings of $39.02 and 14.8 times estimated 2025 earnings of $43.50. Its 52-week trading range is $503.12 to $785.65. Blackrock pays an annual dividend of $20.00 (yield of 3.12%). Total return to shareholders for the past 12 months was 21.09%.
Citigroup
Shares of Citigroup Inc. (NYSE: C), the fifth-largest U.S. bank (by market cap), have dropped about 0.4% over the past 12 months. For the year to date, shares are down about 8.4%.
Among the four big banks, analysts expect Citi to have the second-largest total loan write-offs ($1.6 billion, according to Bloomberg). The big banks are also expected to report higher unrealized losses for the third quarter. Rising bond yields have eaten away at banks’ investments. Net interest income, a staple of revenue, is also expected to decline at the banks. Customers are not borrowing, increasing the costs the banks must pay in interest on deposits.
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