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BAC

Bank of America

$28.78

0.1 (0.35%)

, GS

Goldman Sachs

$227.17

1.87 (0.83%)

14:46
07/12/18
07/12
14:46
07/12/18
14:46

On The Fly: What to watch in next round of big banks' earnings reports

Bank of America (BAC), Goldman Sachs (GS), and Morgan Stanley (MS) are scheduled to report quarterly results on July 16, 17, and 18, respectively. What to watch for: 1. DIVIDENDS, REPURCHASES: On June 28, Morgan Stanley announced its 2018 Capital Plan, which includes the repurchase of up to $4.7B of outstanding common stock for the four quarters beginning in the third quarter of 2018 through the end of the second quarter of 2019, and an increase in the bank's quarterly common stock dividend to 30c per share from the current 25c per share, beginning with the common dividend expected to be declared for the third quarter of 2018. Goldman Sachs also announced that its capital plan will provide for up to $5.0B in repurchases of outstanding common stock and $1.3B in total common stock dividends, including an increase in the bank's common stock dividend of 5c from 80c to 85c per share in the second quarter of 2019. Meanwhile, Bank of America announced that the Federal Reserve also did not object to the company's capital plan, which is estimated to return approximately $26B to common stockholders over the next four quarters through a quarterly common stock dividend increase and common stock repurchases. As part of the capital plan, the bank's board of directors plans to increase its quarterly common stock dividend by 25% to 15c per share, beginning in the third quarter of 2018. Also, the company has been authorized to repurchase approximately $20.6B in common stock from July 1, 2018 through June 30, 2019, which includes approximately $600M in repurchases to offset shares awarded under equity-based compensation plans during the same period. 2. CEO TRANSITION: On May 18, The New York Times reported that Goldman Sachs president David Solomon will likely be appointed CEO by the end of this year, and he is already structuring his senior management team. The time frame for Solomon's rise has evolved since he was named president of the bank in March, establishing him as the heir apparent to longtime CEO Lloyd Blankfein, the report said. Blankfein's departure will likely take place in conjunction with the bank's annual dinner for retired partners in December, the publication added. 3. IHS MARKIT: Ipreo, a financial services solutions and data provider, announced on May 21 the signing of a definitive agreement to be acquired by IHS Markit (INFO). IHS Markit is acquiring the business from private equity funds managed by Blackstone (BX) and by the Goldman Sachs Merchant Banking Division, for $1.855B. Since Blackstone and Goldman Sachs' investment in 2014, Ipreo has grown its revenues by nearly 60%. The acquisition is expected to close in the second half of 2018, subject to customary closing conditions and regulatory filings and approvals. 4. BREXIT: Bank of America plans to relocate up to 125 positions from the U.K. mostly to Ireland as it prepares for Brexit, Reuters reported back in May, citing a corporate filing. The lender said that employees in finance, risk, compliance, technology and credit functions would be impacted and the moves will take place between July and December of this year, the report added.

BAC

Bank of America

$28.78

0.1 (0.35%)

GS

Goldman Sachs

$227.17

1.87 (0.83%)

MS

Morgan Stanley

$48.10

0.37 (0.78%)

INFO

IHS Markit

$52.82

0.01 (0.02%)

BX

Blackstone

$35.07

0.44 (1.27%)

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    Jul

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    Jul

  • 19

    Jul

BAC Bank of America
$28.78

0.1 (0.35%)

04/17/18
BMOC
04/17/18
NO CHANGE
Target $34
BMOC
Market Perform
Bank of America is the best of the 'big four' U.S. banks, says BMO Capital
BMO Capital analyst James Fotheringham kept his Market Perform rating and $34 price target on Bank of America (BAC) after its in-line Q1 earnings but raised his FY18 EPS view to $2.62 from $2.59 and FY19 view to $3.18 from $3.12. Fotheringham says than in contrast, he lowered earnings forecasts for JPMorgan (JPM), Wells Fargo (WFC), and Citigroup (C) because of higher costs and lower revenues, but Bank of America's better than expected net interest income rise justifies his view of the bank as the "best of the bunch". The analyst also notes the bank's more favorable valuation trading at a below-average two-year-forward P/E multiple despite his forecast of double the core earnings growth rate of Bank of America's peers.
04/03/18
BMOC
04/03/18
NO CHANGE
Target $34
BMOC
Market Perform
Bank of America pullback provides a buying opportunity, says BMO Capital
BMO Capital analyst James Fotheringham says that the recent near-10% pullback in the Bank of America stock price provides investors with a buying opportunity. The analyst contends that the bank's stock trades much more closely in line with short term interest rates rather than the 10-year and believes that its net interest margins will prove to be "insensitive" to lower yields on the benchmark as well as higher LIBOR-OIS spreads. Fotheringham keeps his $34 price target and Market Perform rating on Bank of America, adding that its current two-year-forward P/E valuation multiple is close to its long-term historical average.
07/09/18
GSCO
07/09/18
NO CHANGE
GSCO
Bank of America, Morgan Stanley top ideas into Q2 earnings season, says Goldman Sachs
Goldman Sachs analyst Richard Ramsden expects Bank of America (BAC) and Morgan Stanley (MS) to beat consensus estimates in Q2. The analyst argues that both appear best positioned, while he sees risk for U.S. Bancorp (USB) and JPMorgan (JPM). Ramsden highlights Bank of America given the material valuation dislocation that looks to support the stock over time. Additionally, the analyst expects an expense and NII beat for Morgan Stanley.
02/02/18
MSCO
02/02/18
NO CHANGE
MSCO
BofA, JPMorgan, Citi best positioned for tougher CCAR test, says Morgan Stanley
Morgan Stanley analyst Betsy Graseck said she had expected an easier stress test from the Federal Reserve but that the 2018 CCAR test actually seems tougher than last year, given the more intense recessions and lower asset prices modeled in it. A tougher test makes her less optimistic on her strong payout growth expectations, said Graseck, who sees Bank of America (BAC), JPMorgan (JPM) and Citi (C) as best positioned to "weather the storm" and increase payouts given their resilient balance sheets and significant excess capital. She sees Goldman Sachs (GS), which recently cut buybacks, as at risk from a tougher test, which likely weighs on the bank's 2018 ask, Graseck added.
GS Goldman Sachs
$227.17

1.87 (0.83%)

04/18/18
BMOC
04/18/18
NO CHANGE
Target $245
BMOC
Market Perform
Goldman Sachs price target raised to $245 from $221 at BMO Capital
BMO Capital analyst James Fotheringham raised his price target on Goldman Sachs (GS) to $245 after the company's Q1 revenue beat, saying it is "back to stealing market share in its core business" as its FICC - fixed income, currencies, and commodities - trading rose 23% vs. a 4% decline for peers. The analyst adds that while Goldman Sachs will continue to experience positive operating leverage, its valuation relative to Morgan Stanley (MS) cannot be justified, favoring the latter based on its greater exposure to higher-multiple asset management businesses. Fotheringham keeps his Market Perform rating on Goldman Sachs.
06/29/18
OPCO
06/29/18
NO CHANGE
Target $88
OPCO
Outperform
Oppenheimer says 'particularly pleased' with Citi's $17.6B share buyback
Following the release of CCAR results for 2018, Oppenheimer analysts Chris Kotowski and Ben Chittenden told investors in a research note that they are "particularly pleased" with Citi's (C) $17.6B share buyback, up 13% from last year and above their $16.5B estimate, while the dividend increase to 45c was also 5c better than expected. The analysts noted that both Goldman (GS) and Morgan Stanley (MS) got "conditional passes" on their capital plans, as both banks "ran a bit afoul" of the supplementary leverage ratio limitation.
06/20/18
DBAB
06/20/18
UPGRADE
Target $76
DBAB
Buy
Citi upgraded to Buy from Hold at Deutsche Bank
Deutsche Bank analyst Matt O'Connor upgraded Citi (C) to Buy and raised his price target for the shares to $76 from $74. The analyst also calls Goldman Sachs (GS) and Wells Fargo (WFC) his top picks ahead of the Q2 reporting season.
06/22/18
OPCO
06/22/18
NO CHANGE
OPCO
Outperform
CIT a 'clear winner' of Dodd-Frank Stress Tests, says Oppenheimer
Oppenheimer analyst Chris Kotowski noted that Dodd-Frank Stress Test results were released last night and all 35 banks passed. As a result, he told investors in a research note that he does not expect the industry's ability to return capital to be significantly impacted, supporting his view that banks outperform the broader market as the capital returns mean higher ROTCEs, lower share count and higher EPS. Kotowski contended that one clear winner this year is CIT (CIT), as the CCAR limit was increased to $100B, and thus CIT is now exempt, but noted that on the adverse side, Goldman (GS) "squeaked by" with a 5.6% minimum CET 1.
MS Morgan Stanley
$48.10

0.37 (0.78%)

04/19/18
BMOC
04/19/18
NO CHANGE
Target $72
BMOC
Outperform
Morgan Stanley 'richly deserves' higher valuation multiple, says BMO Capital
BMO Capital analyst James Fotheringham kept his Outperform rating and $72 price target on Morgan Stanley after its Q1 earnings beat while also raising his FY18 EPS view to $4.78 from $4.51. The analyst cites his expectations of higher trading revenues and also points to lower EPS volatility relative to that Goldman Sachs (GS), even though Morgan Stanley's multiple of 9.7-times two-year-forward PE is below Goldman's 10-times.
INFO IHS Markit
$52.82

0.01 (0.02%)

05/22/18
05/22/18
UPGRADE

Outperform
IHS Markit upgraded to Outperform on back of Ipreo deal at Macquarie
As previously reported, Macquarie upgraded IHS Markit to Outperform from Neutral with a $60 price target, up from $53. Analyst Hamzah Mazari said the Ipreo deal will drive IHS' organic growth to 5-7% from 4-6% and expects buybacks to resume following deleveraging below 3x in 2H 2019, combined with the divestiture of MarkitSERV. Mazari believes deal synergies will prove conservative and cost synergies are mostly low hanging fruit and are set to run $20M by the end of 2019.
05/22/18
MACQ
05/22/18
UPGRADE
MACQ
Outperform
IHS Markit upgraded to Outperform from Neutral at Macquarie
05/22/18
05/22/18
UPGRADE

On The Fly: Top five analyst upgrades
Catch up on today's top five analyst upgrades with this list compiled by The Fly: 1. Macy's (M) upgraded to Positive from Neutral at Susquehanna with analyst Bill Dreher saying he believes the company's initiatives will generate "significant and unexpectedly strong" operating leverage, leading to what he expects to be a "parade" of beat and raise quarterly reports. 2. Fifth Third (FITB) upgraded to Neutral from Underperform at Baird ant to Neutral from Underperform at Macquarie. 3. AB InBev (BUD) upgraded to Sector Perform from Underperform at RBC Capital with analyst James Jones saying while margin growth may be elusive without volume growth, InBev profitability is likely to be "defendable" given the local nature of its brewing, where "economies of scale in production, marketing and distribution are most evident." 4. Comstock Resources (CRK) upgraded to Equalweight from Underweight at Capital One. 5. IHS Markit (INFO) upgraded to Outperform from Neutral at Macquarie with analyst Hamzah Mazari saying the Ipreo deal will drive IHS' organic growth to 5%-7% from 4%-6% and expects buybacks to resume following deleveraging below 3x in 2H 2019, combined with the divestiture of MarkitSERV. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here.
06/27/18
RHCO
06/27/18
NO CHANGE
Target $61
RHCO
Buy
IHS Markit price target raised to $61 from $54 at SunTrust
SunTrust analyst Andrew Jeffrey raised his price on IHS Markit to $61 and reiterated his Buy rating, saying the company is an "increasingly visible Info Services growth story" offering "above-average" leverage and "robust" free cash flows". Jeffrey cites IHS Markit's investment in data and technology, especially in transportation, as it looks to "embed itself" in its customers' decision process. He believes that the company can sustain a high-single-digit organic revenue growth rate through geographic expansion, new verticals, and added digital market share.
BX Blackstone
$35.07

0.44 (1.27%)

06/08/18
BUCK
06/08/18
NO CHANGE
Target $46
BUCK
Buy
Aspen Insurance exit value $48-$50 per share, says Buckingham
Buckingham analyst Amit Kumar says a 1.25 to 1.3 times multiple on Aspen Insurance's (AHL) current book value gives an exit value of $48-$50 per share. Insurance Insider published a story yesterday that noted the potential finalists in the Aspen bidding process are Blackstone (BX) and Apollo (APO), Kumar tells investors in a research note. He continues to be a buyer of the stock with a Buy rating and $46 price target.
07/10/18
MUFG
07/10/18
DOWNGRADE
Target $27.5
MUFG
Neutral
Gramercy Property Trust downgraded to Neutral from Overweight at MUFG
MUFG analyst Karin Ford downgraded Gramercy Property Trust (GPT) to Neutral with an unchanged price target of $27.50 citing the company's agreement to be acquired by Blackstone (BX).
05/22/18
BARD
05/22/18
DOWNGRADE
Target $34
BARD
Neutral
LaSalle Hotel downgraded to Neutral from Outperform at Baird
Baird analyst Michael Bellisario downgraded LaSalle Hotel (LHO) to Neutral following its buyout offer from Blackstone (BX). The agreement puts the shares at full valuation and essentially matches his buyout math. As a result, he believes a higher bid is unlikely. Bellisario raised his price target to $34 from $32 on LaSalle Hotel shares.
05/21/18
LEHM
05/21/18
UPGRADE
LEHM
Equal Weight
LaSalle Hotel upgraded to Equal Weight from Underweight at Barclays
Barclays analyst Felicia Kantor Hendrix upgraded LaSalle Hotel (LHO) to Equal Weight from Underweight following the company's announcement that it has agreed to be acquired by Blackstone (BX).

TODAY'S FREE FLY STORIES

STT

State Street

$92.84

-2.505 (-2.63%)

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IQ

iQIYI

$32.60

-3.36 (-9.34%)

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BTU

Peabody Energy

$44.10

-0.6 (-1.34%)

17:01
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ISRG

Intuitive Surgical

$521.30

-6.37 (-1.21%)

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WKHS

Workhorse Group

$1.49

(0.00%)

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SPX

S&P 500

$0.00

(0.00%)

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SPDR S&P 500 ETF Trust

$279.95

-1.09 (-0.39%)

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DFS

Discover

$71.52

-0.57 (-0.79%)

16:56
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Hot Stocks
Discover announces new $3B share repurchase plan, raises dividend to 40c »

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DFS

Discover

$71.52

-0.57 (-0.79%)

16:55
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Breaking Hot Stocks news story on Discover »

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07/19/18
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Conference/Events
Stephens business services analyst to hold a dinner meeting »

Business Services Analyst…

WAL

Western Alliance

$58.12

-0.35 (-0.60%)

16:52
07/19/18
07/19
16:52
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16:52
Earnings
Western Alliance reports Q2 EPS 99c, consensus 98c »

Reports Q2: net interest…

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JAZZ

Jazz Pharmaceuticals

$177.06

1.12 (0.64%)

16:47
07/19/18
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JCO publishes pivotal Phase 3 data for Jazz Pharmaceuticals' Vyxeos »

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ISRG

Intuitive Surgical

$521.30

-6.37 (-1.21%)

16:47
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Intuitive Surgical says U.S. showed particular strength »

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NAVB

Navidea

$0.21

-0.0011 (-0.51%)

16:45
07/19/18
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16:45
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16:45
Conference/Events
Navidea to host business news update conference call »

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NGVT

Ingevity

$90.05

0.07 (0.08%)

16:42
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Ingevity files suit against BASF for infringing on canister systems patent »

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PTCT

PTC Therapeutics

$36.61

1.59 (4.54%)

16:40
07/19/18
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Breaking Hot Stocks news story on PTC Therapeutics »

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AEHR

Aehr Test Systems

$2.81

0.13 (4.85%)

16:38
07/19/18
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Earnings
Aehr Test Systems reports Q4 EPS 2c vs. (3c) in Q417 »

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BANF

BancFirst

$62.05

0.2 (0.32%)

16:35
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Earnings
BancFirst reports Q2 EPS 91c, consensus 85c »

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ENFC

Entegra Financial

$30.15

0.05 (0.17%)

16:34
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Earnings
Entegra Financial reports Q2 core EPS 53c, consensus 56c »

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GBCI

Glacier Bancorp

$40.38

0.12 (0.30%)

16:33
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Earnings
Glacier Bancorp reports Q2 EPS 52c, consensus 53c »

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  • 20

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STXB

Spirit of Texas Bancshares

$20.45

0.12 (0.59%)

16:33
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  • 25

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DATA

Tableau

$110.44

-0.76 (-0.68%)

16:32
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16:32
Hot Stocks
Tableau names Damon Fletcher as CFO »

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DAL

Delta Air Lines

$53.00

0.19 (0.36%)

16:31
07/19/18
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16:31
Hot Stocks
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16:30
07/19/18
07/19
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16:30
Options
Preliminary option volume of 18.4M today »

Preliminary option volume…

FIVE

Five Below

$107.80

0.93 (0.87%)

16:29
07/19/18
07/19
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16:29
Hot Stocks
Five Below chairman Thomas Vellios sells over $6.1M in company shares »

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FAM

First American

$10.06

-0.015 (-0.15%)

16:28
07/19/18
07/19
16:28
07/19/18
16:28
Hot Stocks
First American lowers monthly dividend to 7c from 7.5c per share »

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