The earnings season ramps up this week. Analysts polled by Thomson Reuters foresee strong reports from such big names as Apple (AAPL), eBay (EBAY), IBM (IBM), General Electric (GE), Google (GOOG), Schlumberger (SLB) and Southwest Airlines (LUV). Fast on the heels of last week's big earnings beat from JPMorgan Chase (JPM), there will be plenty more results from the financial sector to peruse this week.

Wells Fargo Leads Earnings Winners

Among the financials expected to post double-digit earnings growth this week are Capital One Financial (COF), Morgan Stanley (MS), SLM Corp. (SLM) and U.S. Bancorp (USB), but the week's biggest earnings winner may be Wells Fargo (WFC).

During its fourth quarter, Wells Fargo launched new services and new tools, and also received accolades. Analysts forecast that earnings for the period will come to 61 cents per share, a jump of 86.9% from the same period of last year. The San Francisco-based corporate bank and residential mortgage giant also is expected to post revenue of $21.0 billion for the three months that ended in December. But that's down 7.5% year over year.

For the full year, analysts expect to see earnings of $2.22 per share (+21.2%) on revenue of $84.9 billion (-4.2%). Wells Fargo's earnings have grown sequentially in the past four quarters, as well as beating consensus estimates.

Wells Fargo has a long-term EPS growth forecast of 9.5%, which is better than that of JPMorgan and Bank of America. It's forward price-to-earnings (P/E) ratio of 12.4 is less than the trailing P/E ratio, meaning the stock has become a better value. Its PEG ratio is 1.3 and its dividend yield is 0.6%. The First Call consensus recommendation is to buy WFC. Wells Fargo is just one of the big banks analysts expect to boost its dividend. The mean price target is $36.19. Shares have risen from near the 52-week low of $23.02 threes months ago to once again approaching the 52-week high of $34.25, and they are well above the 50-week and 200-week moving averages.

Bank of America Out of the Red

Several banks that had earnings in the red a year ago are anticipated to report a profitable fourth quarter. These include Bank of America (BAC), Citigroup (C), Comerica (CMA), Fifth Third Bancorp (FITB), Huntington Bancshares (HBAN) and SunTrust (STI).

Analysts anticipate that Bank of America, one of the largest in the U.S., will report Friday that its earnings came to 15 cents per share. That compares to a loss of 60 cents a year ago. The North Carolina-based bank suspended foreclosures, announced the hiring of small business bankers and launched an auto-buying tool during the three months that ended in December, and revenue for that period is predicted to total $25.0 billion, about the same as in the year-ago quarter.

The full-year forecast calls for per-share earnings of 99 cents on $112.7 billion in revenue, compared to a loss of 29 cents per share on $119.6 billion last year. Bank of America earnings were better than expected in the previous three quarters, beating estimates by as much as 18 cents per share.

Bank of America's long-term EPS growth forecast is 8.7% and it has a forward P/E ratio of 12.4 much less than the trailing P/E of 67.1. The PEG ratio is 1.4 and the dividend yield is 0.3%. The consensus recommendation has been to buy BAC for more than 90 days, though some fear the bank could be hit by WikiLeaks revelations. The mean price target is currently $18.19. The share price has grown more than 30% from its 52-week low at the end of November and closed Friday at $15.25.

Diminishing Earnings for Goldman Sachs and Others

Not all is rainbows and lollipops in the sector, though. New York-based Goldman Sachs is expected to post earnings of $3.79 per share for the quarter in which it was hit by a class-action suit and also announced the payout of delayed executive compensation. Those anticipated earnings are less than half of a year ago's $8.20 per share. Analysts also are looking for an 6.4% annual decline in revenue to $9.0 billion for the three months that ended in December.

As for the full year, analysts foresee earnings of $13.24 per share (-40.2%) and revenue of $39.5 billion (-12.6%). But Goldman Sachs earnings have topped consensus estimates most recent quarters, by as much as $3.00 per share.

Goldman Sach's 12% long-term EPS growth forecast is higher than those of rivals JPMorgan and Morgan Stanley, and its forward P/E of 10.7 is less than the industry average. The PEG ratio is 0.9, the dividend yield is 1.0% and the return of equity is 20.4%. Analysts on average still recommend buying GS, and their mean price target is $194.45. Collins Stewart recently initiated the stock with a price target of $205. Shares are about 15% higher than three months ago and ended the week at $175.00.

BB&T (BBT), Northern Trust (NTRS), PNC Financial (PNC) and State Street (STT) are also expected to post per-share earnings smaller than a year ago. First Horizon National (FHN) is expected to post another quarterly loss.

This Week's Other Anticipated Earnings Winners

Analysts are looking for plenty of other companies to offer strong earnings results this week as well, including Amphenol (APH), Cree (CREE), Delta Air (DAL), EZCorp (EZPW), Fastenal (FAST), Freeport McMoRan (FCX), ITT Educational Services (ESI), Johnson Controls (JCI), Linear Technology (LLTC), Parker Hannifin (PH), Rockwell Collins (COL), Union Pacific (UNP) and Xilinx (XLNX).


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14 Comments

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readamspic

Of course Wells Fargo will post double digit earnings....have you seen their CD rates? 3-5 month under pays 0.01%, 60 month and over pays 1.0%

January 19 2011 at 12:55 PM Report abuse rate up rate down Reply
k4jlp

I have been to the Cayman Islands and all you see is rows of banks...GO WIKILEAKS!
looking forward to it...

January 18 2011 at 9:38 PM Report abuse rate up rate down Reply
David

would be fine if they were leanding money

January 18 2011 at 11:00 AM Report abuse +1 rate up rate down Reply
bhawkes328

OH THIS NEXT FALL IS GOING TO BE A BIG ONE

January 18 2011 at 8:11 AM Report abuse rate up rate down Reply
GrayHatsBeGone

IBM execs had better get some really good explanations ready for the upcoming IBM PONZI RICO trial !!!

Details and links --
www.ibmTheWidowMaker.com
Twitter -- www.Twitter.com/MadamePJBailey (IBM Widow)

January 18 2011 at 5:30 AM Report abuse rate up rate down Reply
kathymeeks123

We submitted a request for a mortgage quote and received 3 great offers at "123 Mortgage Refinance". Thank you for helping us lower our house payment with 3.14% mortgage refinance rate. Highly recommend and best place for mortgage refinance.

January 18 2011 at 3:13 AM Report abuse rate up rate down Reply
ornamentalunltd2

Don't worry,It's our White House.....
The Federal Reserved should be held as the best Terrorist company in the world.
For a privet company that's been able to Monopoly the government system... Our Laws, our land,our City's, states, our so called freedom....well I met as slaves. But.. Don't worry just sit there, It's our White House....The banker makes the laws..aaaah.. I mean they corrupt the system to get there way..But...don't worry....
What do I know, I'm just the blacksmith..... I'm sure they make up some story to get you thinking about something new...........

January 17 2011 at 8:47 PM Report abuse rate up rate down Reply
fll235

Sure Morgan Chase had big earnings! They got it all by over charging military families thousands in interest, and foreclosing on homes owned by
military families on active duty which is against the law! Throw the bums in
jail! They broke the law...and against our fighting forces overseas. This
is the worst kind of corporate GREED. They should be fined very heavily for
every military family they shafted and be immediately forced to surrender
all Tarp loans paid to them with super heavy fines and penalties.

January 17 2011 at 2:42 PM Report abuse +6 rate up rate down Reply
jkennedy806

I can't wait in two weeks 40 US politicians will be named in off shore banking accounts in the Cayman Islands. 40 US politicians and only 50 states. Send them all to jail

January 17 2011 at 2:02 PM Report abuse +5 rate up rate down Reply
jkennedy806

Abd be carefull of those reverse mortgages too another scam brought to you by your local banksters

January 17 2011 at 11:49 AM Report abuse +3 rate up rate down Reply