Goldman-led charge on returns maths falls short

October 20, 2016

CEO Lloyd Blankfein finds it odd that shareholders keep pegging the industry's cost of equity at 10 pct. The ECB reckons it has been lower, but fluctuates wildly. There is some premise for lowering it, but regulation, dividend curbs and other factors make swaying opinion hard.

Morgan Stanley positioned for Fed-fueled liftoff

October 19, 2016

Solid trading and cost cuts left the third-quarter return on equity just shy of CEO James Gorman's 2017 target. Rate hikes would help the firm's lending unit. The bank is one of the best capitalized, and it could rival Goldman's ROE if watchdogs let it buy back more shares.

Goldman Sachs charts frustrating path back to top

October 18, 2016

Trading, share buybacks and operating leverage all helped the investment bank to its best showing in a year-and-a-half. It took big investment gains and a lower tax rate to beat its cost of capital. That's too unreliable to justify Goldman's stock heading back above book value.

BofA takes step toward still improbable goal

October 17, 2016

The lender with $2.2 trln of assets is alone among big peers in boosting earnings last quarter - the best pre-tax showing in a decade. CEO Brian Moynihan is making progress. Yet absent big interest-rate hikes or stock buybacks, a decent return on equity remains a long way off.

JPMorgan and Citi hint at broader Wells Fargo woes

October 14, 2016

Wall Street helped the two diversified mega-banks trounce expectations, while the more retail-focused of the trio just squeaked by. Falling returns also will test new Wells Fargo CEO Tim Sloan as he contends with the sham-accounts fiasco. High-level cross-selling sometimes helps.

Tesla’s acceleration may get investors shaking

May 5, 2016

The electric-auto maker expects to produce 500,000 vehicles two years earlier than planned amid strong demand for its new Model 3 sedan. Such ambition is typical for boss Elon Musk. The cash and technical capabilities involved, however, increase risk with the potential rewards.

Exxon Mobil reaches bottom of the oil barrel

April 29, 2016

The energy goliath suffered a 63 pct fall in quarterly profit. Rivals Chevron and Conoco were hurting, too, as crude fell below $30 in January before investment cuts helped ease excess supply and push up the price. Recovery will be slow and uneven, but the worst is probably past.

Morgan Stanley growth plays 2016 version of Godot

April 18, 2016

The Wall Street firm’s $1.1 bln Q1 showing makes it unlikely CEO James Gorman will this year hit his 10 pct return on equity target. Even giving investors all the bank’s excess capital wouldn’t do the trick. Cost cuts might help, but higher earnings are taking forever to arrive.

Mike Corbat now entangled in banking Catch-22

April 15, 2016

The Citigroup boss aced both the living will and stress tests. He also has fashioned an efficient operation, evidenced by Q1 results. To improve on a 6.4 pct return on equity, though, will require exhausting tax breaks. And to do that depends on finding more elusive profit.

Valeant CEO back with less power and no glory

February 29, 2016

Mike Pearson has returned from illness, stripped of his chairmanship. The $25 bln drugmaker also withdrew guidance and will further delay reporting 2015 results. Marginally better-looking governance isn’t enough to give investors like Bill Ackman hope of reversing losses.