Top US stocks to watch before the bell: Banks and Coinbase
Joshua Warner April 14, 2021 8:26 AM
JPMorgan, Goldman Sachs and Wells Fargo paint a rosy outlook for the economy after smashing expectations, Coinbase is going public today, and Taiwan Semiconductor allays fears that a power outage at one of its plants will add to problems with global supply shortages.
JPMorgan Chase revealed first quarter profits soared to $14.3 billion from just $2.9 billion the year before when the pandemic hit, driven by higher consumer spending and an improved performance from its investment bank.
Net income of $4.50 per share smashed expectations of just $3.10.
The bank said the US economy ‘has the potential to have extremely robust, multi-year growth’ and said it was releasing $5 billion of reserves it had set aside to cover potential loan defaults during the pandemic.
Goldman Sachs also beat expectations as it revealed net earnings jumped to $6.7 billion in the first quarter from $1.1 billion the year before, boosted by the surge in demand for SPAC deals and strong growth from its global markets division as overall revenue more than doubled.
The bank’s earnings per share rose to $18.60 from just $3.11 the year before, well ahead of analyst expectations for EPS of just $10.22.
Wells Fargo followed its peers and reported a strong rebound in first-quarter profits that also beat expectations as it set aside less money to cover bad loans expected because of the pandemic.
Quarterly profit increased to $4.74 billion from $653 million the year before. EPS per share of $1.05 compared to just $0.01 the year before and was well ahead of the $0.70 expected by analysts.
Profits in the prior year were dragged down by provisions for the surge in bad loans expected to materialise when the pandemic erupted last year, but this has not been as bad as expected as the economy has been bolstered by the government’s stimulus and vaccination programme.
Coinbase is going public by listing on the Nasdaq today in what is expected to be a huge listing that could value the cryptocurrency exchange at anywhere between $68 billion to possibly $100 billion.
It is a landmark moment for the wider crypto industry and represents the huge shift in acceptance of bitcoin and other coins over recent years. The listing comes as bitcoin reaches new highs, which should go in Coinbase’s favour. The reference price of $250 would give Coinbase a valuation of $65 billion, but that is not an indication of what price the stock will open or close at today.
Taiwan Semiconductor Manufacturing (TSMC)
TSMC said it has restored power at one of its major manufacturing plants in southern Taiwan after being hit by an outage, prompting added concerns on the supply of chips to the global market.
The company makes chips for firms like Apple and Qualcomm and the outage came at a time when there are global supply shortages of chips. TSMC said some of its operations were able to use backup generators during the outage and said power was restored on the same day. It is now evaluating the impact the incident has had on output.
Bed, Bath & Beyond
Bed, Bath & Beyond said net sales tumbled by around 16% in the fourth quarter of its financial year, reporting revenue of $2.63 billion and adjusted earnings per share of 40 cents.
Revenue came in line with expectations while EPS beat analyst forecasts of 31 cents. Bed, Bath & Beyond reaffirmed its guidance issued in January that annual revenue this year will be between $8 billion and $8.2 billion and said it is expecting to report a strong rebound in sales during the first quarter.
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