It seems like a pattern is developing on Wall Street with respects to big banks. Almost every major financial institution has beaten earnings in the past couple of weeks and today proved to be no different.
CNBC reports that:
Goldman Sachs posted earnings Tuesday that easily beat expectations on the top and bottom lines. The company also disclosed it plans to buy back $8.7 billion in shares after being “extensively engaged” with shareholders on the issues.
They also report that Goldman beat EPS expectations by eighty five cents! While their stock may not be flying high in regular trading today (the stock dipped after pre-market trading) the bank does seem to be positioning itself strongly for the future. Between their push to raise dividends and aggressive buyback strategy, the bank will hope to attract new shareholders in the coming year.
Even more impressive than Goldman’s earnings were Morgan Stanley’s. Business Insider reports that:
The investment bank reported earnings of $0.93 a share, while analysts were expecting earnings of $0.81 a share.
In a comment from CEO James Gorman, they also write that:
“Our third quarter results reflected the stability our Wealth Management, Investment Banking and Investment Management businesses bring when our Sales and Trading business faces a subdued environment,”
These sorts of performances have typified the banking sector’s earnings as of late. Low volatility and weak commodities have caused a majority of banks to lose heavily on the trading floor while their banking services have propped them up. However, Morgan Stanley’s numbers are particularly strong; Business Insider points to several departments that gained over 9% (such as wealth-management and investment banking).
Both these banks offer investors solid blue chip stocks that look like they have built themselves a very stable platform for the future. If the traders can turn it around in the coming quarter then these banks can really take off. Now that expectations are low, whichever one outperforms going forward may become the front runner in American banking stocks.
To read CNBC’s article on Goldman Sachs’ earnings, click here.
To read Business Insider’s article on Morgan Stanley’s earnings, click here.
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