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Top picks for the US accounting season: Goldman Sachs names favorites
Find out which US banks are the top stocks for the April 11, 2024 earnings season, according to Goldman Sachs. Financial experts share their assessments of the upcoming quarterly submissions. Get the inside scoop now!
Top picks for the US accounting season: Goldman Sachs names favorites
The upcoming accounting season in the USA traditionally begins with the quarterly results of the heavyweights of the US banking sector. Goldman Sachs has selected its top picks among US banks ahead of its first financial statements on Friday. Favorites include Wells Fargo and JPMorgan, which GS analysts rated as promising investment opportunities.
These banks' positive assessments are based on their conservative forecasts for net interest income, which, according to GS chief analyst Richard Ramsden, offers greater potential for surprises in quarterly results. Additionally, both banks are expected to benefit from the general recovery and gains in the capital markets.
JPMorgan could also benefit from purchasing First Republic Bank, which would lead to synergy effects. This strategic move could further drive the bank's growth. As a result, Goldman Sachs has raised its price targets for JPMorgan and Wells Fargo and reiterated its buy ratings.
Buy recommendations were also made for the other banks covered by Goldman Sachs, such as Morgan Stanley, Bank of America and Citigroup. U.S. Bancorp and PNC, however, remain rated “neutral”.
Banks could face a more difficult business environment in the future due to expected interest rate cuts by the US Federal Reserve. These possible monetary policy measures could affect banks' profitability. Additionally, problems in the commercial real estate sector could place strains on banks as rising borrowing costs and potential defaults could weigh on balance sheets. Developments in this area will therefore be closely monitored in the coming quarterly reports.