Financials

Citigroup’s First Quarter Profit Falls 27%, But Beats Expectations — WSJ

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By Justin Baer Citigroup reported a 27% drop in its first-quarter profit as expenses, including from the banks restructuring plans, offset revenue gains by some of its biggest businesses. The third-biggest U.S. banks shares rose 1% in early trading after the results were announced. Here are the numbers you need to know: — Citi reported net income of $3.37 billion, or $1.58 a share, compared with net income of $4.61 billion, or $2.19 a share, a year earlier. Analysts expected $1.18 per share, according to FactSet. — Revenue fell 2% to $21.1 billion from $21.45 billion. Wall Street was looking for $20.46 billion, according to FactSet. Citis revenue tally a year ago included a $1 billion gain on the sale of its consumer-banking arm in India. — Citis Services business, which provides a range of banking and treasury services for companies and investment managers, posted revenue of $4.8 billion, up

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Swiss Government Backs Tougher Rules for Banks, Causing UBS Shares to Drop

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By Louis Goss Switzerland’s government on Wednesday put forward plans that would see the country’s top banks subject to new rules aimed at preventing a repeat of the crisis that crashed Credit Suisse in March 2023, in an announcement that caused UBS shares to drop. In a 209 page document, Switzerland’s Federal Council recommended a package of 22 measures that could see new limits placed on bankers’ bonuses and see banks forced to keep more capital on their books to prevent another crash. If approved, the 22 measures could also see greater powers and more resources given to Switzerland’s banking regulator, FINMA, and see systemically important banks including UBS subject to stricter corporate governance rules. Shares in Switzerland’s top bank UBS (UBS) (CH:UBSG) fell 4% following publication of the document on Wednesday, after gaining 40% over the previous 12 months during which it acquired its main rival Credit Suisse in

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Investors Should Stick to ‘More Defensively Positioned Asset Allocation’ For Now, Wells Fargo Investment Institute Says

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Investors in the US stock market should maintain a “more defensively positioned asset allocation” while awaiting clarity on the direction of inflation and interest rates, Wells Fargo Investment Institute said in a report Tuesday. The firm advised investors to prioritize quality and liquidity in equities and fixed income and maintain broad exposure to commodities in the meantime. As headwinds emerge in the current economic cycle amid low household savings, rising credit-card delinquency rates, and the lagged effect of higher interest rates on credit-sensitive sectors, a more noticeable growth slowdown is expected in the second half of the year, the report said. Wells Fargo said the downturn is, however, being cushioned and delayed by “unusually accommodative financial conditions” amid the ongoing “rapid” disinflation in the US and an “early reprieve” from high borrowing costs. It said an “abnormally low level of financial stress” thus prevails in the economy. “Ultimately, we believe

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Morgan Stanley (NYSE:MS) Stock Analyst Ratings

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Morgan Stanley (NYSE:MS) Stock Analyst Ratings Date Upside/Downside Analyst Firm Price Target Change Rating Change Previous / Current Rating 04/09/2024 — JMP Securities Reiterates → Market Perform 04/05/2024 0.13% Keefe, Bruyette & Woods $91 → $94 Maintains Market Perform 04/04/2024 8.66% Evercore ISI Group $97 → $102 Maintains Outperform 03/28/2024 6.52% HSBC $96 → $100 Maintains Hold 03/27/2024 -3.06% RBC Capital → $91 Reiterates Sector Perform → Sector Perform 03/19/2024 3.33% Oppenheimer $109 → $97 Maintains Outperform 01/30/2024 16.11% Oppenheimer $106 → $109 Maintains Outperform 01/17/2024 12.92% Oppenheimer $107 → $106 Maintains Outperform 01/17/2024 13.98% BMO Capital $106 → $107 Maintains Outperform 01/17/2024 -3.06% Keefe, Bruyette & Woods $102 → $91 Downgrades Outperform → Market Perform 01/17/2024 -7.32% JP Morgan $94 → $87 Downgrades Overweight → Neutral 01/09/2024 1.2% UBS $80 → $95 Maintains Neutral 01/09/2024 0.13% JP Morgan $92 → $94 Maintains Overweight 01/09/2024 2.26% HSBC → $96 Downgrades

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MSCI Q1 Results to Modestly Beat Estimates Over ABF Strength, RBC Capital Says

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MSCI’s (MSCI) Q1 results could modestly beat estimates on the back of asset based fees, or ABF, strength, RBC Capital Markets said in an earnings preview emailed Monday. The firm said it was modeling a 15% year-over-year increase in Q1 ABF, roughly in line with the 15.9% posted last quarter. However, RBC said it was conservatively estimating Q1 revenue of $682 million, in line with consensus. Meanwhile, net new subscriptions should rise single digit year-over-year after declining for the last five quarters, the note said. RBC Capital has an Outperform rating on the company’s stock with a price target of $638. MSCI shares were up 1% in recent Monday trading.

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Bank of America Could Face Limited Upside If or Not Fed Cuts Rate, UBS Says

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Bank of America (BAC) could have limited upside given a combination of macroeconomic factors, UBS Securities said in a note emailed Thursday. UBS considers the bank’s stock to be at fair value following adjustments to account for three Federal Reserve rate cuts in 2024 and four cuts in 2025. The company has a positive momentum going with strong deposit growth, increase in investment banking and markets activity, and potential buybacks, especially in the second half. With Bank of America’s stock in the high $30s, trading at 12x its estimated 2024 EPS and 11.5x its estimated 2025 EPS, and $4 EPS unlikely until 2026, assuming there’s no recession, “this is now fairly reflected in market multiples,” UBS said. However, the conundrum is that if the Fed cuts rates, the bank will have to lower EPS estimates, and if the Fed keeps rates high, Bank of America could make more money, but

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