Early indications from companies like Wachovia and General Electric show that the last half of March may have been tougher on bank earnings than Wall Street expects. Bloomberg recently reported that Citigroup, JP Morgan, and Wells Fargo could all miss consensus estimates. But by how much?
A look at the spread of Q1 estimates gives some hint about how far off actual numbers could be compared with investor expectations. At Citigroup, among 15 analysts polled by First Call the average EPS estimate is a loss of $.95. But, the lowest estimate is a loss of $2.24. At JP Morgan, the average figure from fourteen analysts is $.66, but the worst case is a loss of $.11. For Wells Fargo, twenty-three analysts have an average forecast of Q1 EPS at $.57, but the low number is $.45.
The huge discrepancy among the numbers should be troubling to shareholders because recent information would argue that share prices for most banks and brokerages may still be way too high.
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