5 Stocks with Rising Price Targets in a Falling Earnings Environment

Is there a discrepancy between valuation and performance?

SmallCapPower | April 15, 2016: First-quarter earnings for large banks have started to be released, and so far so good. JP Morgan beat estimates, pushing stock prices higher for most banks. There seems to be a discrepancy, however, between valuations and performances. Looking at some of the upcoming banks expected to report financial results, such as the ones on our list, and it is evident that analysts are expecting drops in profitability yet forecasting high returns based on their target prices, with the exception of Lazard Ltd.

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Santander Consumer USA Holdings Inc. (NYSE:SC) – $11.37
Consumer Lending

Santander Consumer USA Holdings Inc. is a holding company and a specialized consumer finance company focused on vehicle finance and unsecured consumer lending products. The Company offers various auto financing products and services to Chrysler customers and dealers under the Chrysler Capital brand. These products and services include consumer retail installment contracts and leases, as well as dealer loans for inventory, construction, real estate, working capital and revolving lines of credit.

The company is reporting on the 26th, with a mean EPS estimate of $0.56, a 32% drop from a year ago.

• Market Cap: $1,790,728,391
• P/B: 0.9x
• Price Target (mean): $15.08
• Upside to Target Price: 35%

Lazard Ltd. (NYSE:LAZ) – $37.93
Investment Banking & Brokerage Services

Lazard Ltd (Lazard) is a financial advisory and asset management company. The Company operates in two business segments: Financial Advisory and Asset Management.

The company is reporting on the 20th, with a mean EPS estimate of $0.67, a 47% rise from a year ago.

• Market Cap: $4,897,372,274
• P/B: 3.7x
• Price Target (mean): $50.63
• Upside to Target Price: 34%

Citigroup Inc. (NYSE:C) – $44.98
Banks

Citigroup Inc. (Citi) is a financial services holding company, whose businesses provide consumers, corporations, governments and institutions with financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, trade and securities services, and wealth management. The Company operates through two primary business segments: Citicorp and Citi Holdings.

The company is reporting on the 15th, with a mean EPS estimate of $1.03, a 32% drop from a year ago.

• Market Cap: $130,149,146,203
• P/B: 0.6x
• Price Target (mean): $56.08
• Upside to Target Price: 27%

Morgan Stanley (NYSE:MS) – $26.17
Investment Banking & Brokerage Services

Morgan Stanley is a financial holding company. Through its subsidiaries and affiliates, the Company provides a variety of products and financial services to a group of clients and customers, including corporations, governments, financial institutions and individuals. The Company’s operating segments include Institutional Securities, Wealth Management and Investment Management.

The company is reporting on the 17th, with a mean EPS estimate of $0.46, a 62% drop from a year ago.

• Market Cap: $50,197,099,191
• P/B: 0.7x
• Price Target (mean): $32.39
• Upside to Target Price: 25%

Goldman Sachs Group Inc. (NYSE:GS) – $160.91
Investment Banking & Brokerage Services

The Goldman Sachs Group, Inc. is a bank holding and a financial holding company. The Company is a global investment banking, securities and investment management company that provides a range of financial services to a diversified client base that include corporations, financial institutions, Governments and individuals.

The company is reporting on the 18th, with a mean EPS estimate of $2.45, a 60% drop from a year ago.

• Market Cap (mm): $66,938,469,177
• P/B: 0.8x
• Price Target (mean): $188.00
• Upside to Target Price: 18%

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