Bank Earnings In Focus: An Empirical Look At S&P 500 Banks

Large banks, including JPMorgan, Wells Fargo, Citigroup, and Bank of America, have reported first quarter results, and earnings and loan growth continues to be strong. However, share prices have pulled back, and investors may wonder which, if any, bank stocks still present value.

S&P Global Market Intelligence’s recent paper, Banking on Alpha: Uncovering Investment Signals Using SNL Bank Data, shows investors empirically which investment strategies¹ have been most predictive of bank stock returns historically. The paper identifies widely-used investment strategies that work well empirically, as well as lesser-used strategies that deserve investor attention. It also highlights the strategies that work best across varying macro environments: rising vs. falling interest rates and high vs. low financial stress.

Some key findings of...