The large bank earnings are not available and the results were positive enough to weaken a concern about their valuations, CNBC’s Jim Cramer said on Thursday.
The shares of major financial institutions such as JPMorgan Chase and Wells Fargo have risen since last summer, far exceeding the market.
Cramer, himself an alum of Goldman Sachs’ investment store, said their quarterly numbers should be strong enough to support their current valuations.
“We have one more thing to worry about now that the earnings season is underway. The banks are doing pretty well, even though their shares do not necessarily reflect that fact,” the Mad Money host said.
JP Morgan, Goldman and Wells Fargo all posted results on Wednesday, followed by Citigroup and Bank of America the next day. Despite every company showing the best and best hits in the first quarter of this year, their shares traded in the wake of their reports.
After reviewing the reports, he doubles his belief that the banks are worth finding out.
“I’m still positive about the financials, especially the investment banks like ‘Goldman Slacks’ and the turnaround like Wells Fargo,” he said. ‘
Below is a summary of Cramer’s response to earnings reports from the five financial giants:
Goldman Sachs
- Earnings: $ 18.60 per share versus $ 10.22 per share expected by analysts by Refinitiv.
- Income: $ 17.7 billion versus $ 12.6 billion expected.
‘The numbers were so strong that I brought back the old [nickname] “I call them ‘Golden Slacks,'” Cramer said. If it had traded at tenfold earnings, it would have been a share of $ 413 … I bet that’s where he’s headed, especially now that Goldman may buy back stock. “
JPMorgan
- Earnings: $ 4.59 per share versus $ 3.10 per share expected by analysts at Refinitiv.
- Income: $ 33.12 billion versus $ 30.52 billion.
“For me it was the second best report yesterday, although the market apparently did not agree as investors sold the news. But make no mistake, the numbers were fantastic,” he said. “I think the downturn in JP Morgan shares is a buying opportunity, simple and straightforward, and it’s clear that someone agrees, because the stock started recovering today.”
Wells Fargo
- Earnings: According to Refinitiv, it earns $ 1.05 per share per share compared to 70 cents per share.
- Income: $ 18.06 billion versus $ 17.5 billion expected.
“Wells Fargo roared yesterday because it’s more of a reversal story than a bank story. That’s why we actually own it for my charity trust,” Cramer said. “I’m still telling you it’s a better buy than JP Morgan’s because expectations for Wells are much lower, and yesterday they’s absolutely cleared the low measure. ‘
Citi
- Earnings: According to Refinitiv: $ 3.62 per share, compared to $ 2.60 per share.
- Income: $ 19.3 billion, compared to $ 18.8 billion expected
“Like the banks that reported yesterday, Citi has a lot of power on the investment bank side, but traditional consumer banking services were much less impressive,” he said. “If I had to arrange this term, you know what, I’d put it right under JP Morgan’s.”
Bank of America
- Earnings: 86 cents per share, compared to 66 cents per share expected by analysts by Refinitiv.
- Income: $ 22.9 billion, compared to $ 22.1 billion expected.
“It got the worst reaction from the market. I’m going to say the market is wrong. It tumbled almost 3% today. I thought it was insulting,” Cramer said. “There was nothing particularly surprising in the quarter itself. Do not be desperate. If we get some rate hikes, this is the one we should own, and we will eventually get it.”
Disclosure: Cramer’s charity owns shares in Wells Fargo.
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