Bank Stocks Expected to See EPS Growth Amid Market Uncertainty

Bank Stocks Expected to See EPS Growth. The recent volatility in the S&P 500 has worried some investors, but forecasts for earnings per share (EPS) of banks like Bank of America, Citigroup, and Wells Fargo indicate potential upside, driven by increased deposits.

Date: 08-03-2025

AI Rating: 7

The report highlights a promising outlook for banks amid current market volatility. A slow decline in consumer spending has led to an increase in the personal savings rate, which may boost earnings for several financial institutions.

Earnings Per Share (EPS): The analysis indicates that EPS for major banks is expected to rise significantly in the upcoming fourth quarter of 2025. For instance, Bank of America is projected to achieve an EPS of $0.96, marking an increase from $0.82. Similarly, Citigroup's EPS is forecasted to increase to $1.85 from $1.34, which represents a growth rate of 38%. Wells Fargo is also expected to see an EPS rise to $1.60 from $1.43, reflecting a 12% growth.

This anticipated EPS growth is connected to idle deposits being utilized as capital for new products, contributing to enhanced net interest income (NII), which significantly affects the banks' earnings performances.

Market Sentiment: The report mentions that these banks trade near 90% of their 52-week highs, illustrating optimism about their future performance based on strong EPS forecasts and rising deposit levels. Analysts have a bullish outlook, with projected price targets indicating considerable upside, such as a 32% increase for Bank of America and a 50.8% potential upside for Citigroup.

The insights shared in this analysis reveal an underlying opportunity in these financial institutions amid a challenging economic environment, highlighting that bank stocks could be a focal point for investors seeking stability and growth.

Stocks: BAC C WFC