Nuscale Power earnings missed by $0.02, revenue fell short of estimates
Investing.com - U.S. banks likely face risks from broader economic uncertainty, but are still seen posting improved earnings momentum, according to analysts at HSBC.
The outlook for the U.S. economy has been clouded over in recent months by President Donald Trump’s plans to impose sweeping tariffs on both friends and adversaries alike.
Some economists have flagged that the moves threaten to refuel inflationary pressures and dent growth. Consumer spending rebounded by less than anticipated in February and a metric tracking underlying prices rose by the most in 13 months, data showed on Friday, while a survey of 12-month consumer inflation expectations spiked to the highest point in almost 2-1/2 years in March.
Trump is expected to unveil a batch of new levies at a much-anticipated announcement on April 2. Since taking office for second term in the White House earlier this year, Trump’s policy changes have included increased tariffs on China, levies on steel and aluminum goods, and proposed duties on imported cars and light trucks.
With fears swirling around the eventual impact of these actions, shares in banks have slipped, with a S&P index tracking the sector falling by about 2.4% so far this year.
"The banks and brokers in our coverage universe have underperformed since mid-February on the back of heighted economic and policy uncertainty. We acknowledge greater downside risks," the HSBC analysts said in a note to clients.
They lowered their 2025 and 2026 earnings estimates for banks they cover by roughly 2% to 5% to reflect expectations for lower net interest income and reduced investment banking fees.
However, "in the absence of a material economic downturn and much lower rates across the curve," the analysts reiterated its estimate that banks are on track to post "improved earnings and profitability momentum."
In individual stocks, the analysts upgraded their rating of PNC Financial Services (NYSE:PNC) to "buy" from "hold," citing an "attractive entry point" for the stock after a 19% decline from highs reached in late November 2024.
They added that they are "more cautious" on Wall Street giants Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS), slashing their price targets for the lenders to $128 and $605, respectively.