You might have expected financial stocks to be among the worst performers in the S&P 500 this year, in light of three high-profile bank failures, the pressure from the decline in market values for banks’ bond holdings and the competition for deposits as interest rates have risen. But the financial sector is down 2.8% this year with dividends reinvested. Maybe this is because bank stocks are inexpensive enough to attract long-term investors.
JPMorgan Chase & Co.
will kick off the banking industry’s third-quarter earnings season on Oct. 13 before the market open, with Citigroup Inc.
and Wells Fargo & Co.
also reporting that day. Bank of America Corp.
and Goldman Sachs Group Inc.
will report on Oct. 17, and Morgan Stanley
will round out the “big six” U.S. banks with its third-quarter earnings announcement on Oct. 18. Below are tables showing what analysts expect for the largest 20 U.S. banks by total assets. But first let’s look at stock performance and valuations.Big bank stocks are cheap Here are weighted forward price-to-earnings valuations for the 11 sectors of the S&P 500
sectors and broad stock indexes with a comparison of current valuations to 5- and 10-year averages:
5-year average P/E
10-year average P/E
Current P/E to 5-year average
Current P/E to 10-year average