Earnings season is right around the corner for big bank stocks, and Deutsche Bank analyst Matt O’Connor recently outlined four key themes that bank investors should be watching this earnings season:
1. Bank of America Corp BAC, Citizens Financial Group Inc CFG, JPMorgan Chase & Co. JPM and PNC Financial Services Group Inc PNC should benefit the most in Q1 from rising short rates.
2. The banking industry will likely see M&A activity throughout 2016.
3. The Atlanta Fed recently lowered its Q4 real GDP growth estimate to +0.7 percent.
4. Credit costs for large regionals likely rose from 0.31 percent in Q3 to 0.39 percent in Q4.
Deutsche Bank named PNC, U.S. Bankcorp USB and Wells Fargo &Co WFC as its top banking stock picks ahead of earnings season.
Disclosure: the author owns shares of Bank of America.
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