Here’s what Wall St. experts are saying about these banks ahead of earnings

JPMorgan (JPM), Citigroup (C), Wells Fargo (WFC) are scheduled to announce quarterly results on April 12. What to watch for:

MOVING TO THE SIDELINES: On Tuesday, Compass Point analyst David Rochester downgraded Wells Fargo to Neutral from Buy with an unchanged price target of $64. The firm continues to see a number of “key potential positives to the story” over the next year, including the possible removal of additional regulatory consent orders and the asset cap, stronger buyback activity and potential near-term continued relative strength in the shares on delayed Federal Reserve rate cuts under a higher-for-longer interest rate scenario. However, Wells Fargo’s valuation reflects these catalysts “much more appropriately” currently following the material relative strength in the shares year-to-date, Compass Point tells investors in a research note. The firm finds the stock’s risk/reward as more balanced over the next year moving into a period of declining interest rates in the second half of 2024 and 2025.

TARGET RAISE AHEAD OF EARNINGS: On Monday, Jefferies raised its price target on JPMorgan to $228 from $202 and kept a Buy rating on the shares. In a Q1 preview for the U.S. banks group, the firm made “modest” estimate revisions, based mostly on a move to expecting six Fed cuts from eight through 2025, softer loan growth, and better capital markets fees. Jefferies now forecasts three Fed cuts of 25 basis points each in 2024 and three cuts in 2025. Jefferies also raised the firm’s price target on Wells Fargo to $60 from $52 and on Citi to $65 from $56, while keeping Hold ratings on both names.

Earlier this month, UBS had also raised the firm’s price target on JPMorgan to $226 from $196, while maintaining a Buy rating on the shares as part of a Q1 earnings preview for the bank and consumer finance group. Bank stocks have had a nice run coming out of Q1 conference season as investors “breathed a sigh of relief” over a lack of major net interest income outlook revisions from regional banks, the analyst tells investors in a research note. However, UBS believes banks are not yet “out of the woods” in terms of downward revisions, which makes it think a “breather in the stocks is ahead — especially if the market continues to price in dwindling rate cut odds.” UBS also raised the firm’s price target on Buy-rated Wells Fargo to $65 from $56 and on Neutral-rated Citi to $66 from $60.

As part of a Q1 earnings preview for the diversified financials group, Seaport Research raised its price target on JPMorgan to $213 from $194 and kept a Buy rating on the shares. While Q1 was negatively impacted by additional FDIC special assessment charges and higher reserve builds in cards, improving trends across investment banking, asset management, deposits, and the forward curve should drive earnings increases in 2025, the firm tells investors in a research note. Seaport continues to prefer the banks over capital markets names given lower valuation multiples relative to historical averages and lower expectations embedded in the banks’ forward outlook. Seaport Research also raised the firm’s price target on Buy-rated Wells Fargo to $69 from $61and on Buy-rated Citi to $75 from $68.