Betting on the Banks: JPM, WFC, C, BAC

October 08, 2012, 09:24 am ET, BY Billy- Contributor| Editor: Thomas H. Kee Jr. (Follow on LinkedIn)

In the coming days, the nation’s largest financial institutions will begin to report their Q3 earnings. The results are expected to be mixed. Most of these companies have witnessed encouraging technical indicators from their stock prices, but may need solid fundamentals for these trends to continue. Here is what traders can expect from the big banks.

Getting Technical

On Friday, prior to the market open, JPMorgan Chase & Co. (NYSE:JPM) is slated to announce its Q3 results. The consensus among analysts is that the company will report EPS of $1.22 versus $1.02 in the prior year quarter. Total revenue is expected to remain comparatively flat.

Shares of JPM experienced a bullish indicator when their 50-day moving average broke above the 200-day moving average last week. The stock appears to be a safe bet ahead of its earnings announcement. JPMorgan Chase has met or topped estimates in each of the last four quarters. A beat here and the stock will continue to trend higher.

Another bank for traders to consider prior to its earnings announcement on Friday is Wells Fargo & Company (NYSE:WFC). The company has posted slight beats in three of the last four quarters. This time analysts are calling for a 20.8% pop in EPS and a 9.3% uptick in total revenue when compared to the prior year quarter. The stock is having a lights out year as it has risen 30.0% year-to-date.

Citi Life

On Monday of next week, earnings results from the big banks will continue to roll in as Citigroup Inc. (NYSE:C) checks in with its Q3 numbers. Wall Street is expecting EPS of $0.96 versus $1.23 in the year-ago quarter. Total revenue is expected to slide to the tune of 10.0% on a year-over-year basis.

Despite the stock’s 50-day moving average slicing above its 200-day moving average last week, traders may be best served by taking a wait and see approach with Citi. The company has beaten estimates in three of the last four quarters, but it had a big miss in Q4 of last year. It is a bit of a wildcard right now.

One other name for traders to keep an eye on in the coming trading sessions is Bank of America Corp (NYSE:BAC). The company reports its quarterly results next week as well. The consensus among analysts is that the company will announce EPS of $0.06 versus $0.56 in the prior year quarter. Total revenue is expected to decrease by 22.6%. The stock experienced a moving average crossover back in March, and has begun to shows signs of life during the last few weeks after a summer stalemate.

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