Banks face Wall Street pessimism over earnings

Bloomberg

Bank stock downgrades keep piling up as analysts caution about interest rates and credit with fourth-quarter earnings due to kick off next week.
Raymond James downgraded 13 banks and lowered earnings estimates for most banks across its coverage. Analysts David Long and Michael Rose expect “abundant” downward revisions to net interest margin “with rates no longer providing such a benefit to asset yields, and deposit betas continuing to rise.”
They also warned of slowing loan growth and accelerating loan loss provisions.
The KBW Bank Index and KBW Regional Banking Index both fell 0.6 percent at 9:37 a.m. in New York.
After a brutal 2018, bank stocks had rallied last week after a better-than-expected jobs report and encouraging remarks by Federal Reserve Chairman Jerome Powell.
Raymond James downgraded Business First, Hancock Whitney and Independent Bank to outperform from strong buy. First Horizon, First Midwest, First Republic, Hanmi Financial, LegacyTexas Financial, Towne Bank, United Community Banks and UMB Financial were cut to market perform from ou-tperform. Associated Banc-Corp and Trustmark were lowered underperform from market perform.
Separately, Macquarie analyst David Konrad cut Bank of America Corp to neutral after the stock’s recent outperformance.