The US bank stock earnings season is set to begin on Monday, April 13, Eastern Time, with Goldman Sachs (GS.US) releasing its first-quarter 2026 results before the market opens. In a recent report, Deutsche Bank projected that the overall performance of bank stocks will be robust, with net interest income (NII) for most banks expected to reach the upper end of their guidance ranges—or even higher. Capital markets business trends are strong, including investment banking and trading activities, while operating leverage remains favorable and asset quality stays stable.
Deutsche Bank highlighted Huntington Bank (HBAN.US), PNC Financial Services Group (PNC.US), and U.S. Bancorp (USB.US) as its top picks ahead of the earnings releases. The bank noted that, given this is only the first quarter of the year and macroeconomic uncertainties have increased, most banks are unlikely to make significant adjustments to their full-year 2026 guidance. However, within its coverage, JPMorgan Chase (JPM.US) may raise its full-year NII guidance again, driven by strong loan growth and rising interest rate expectations. Bank of America (BAC.US) could also raise or at least tighten its guidance toward the mid-to-high end of the range. Other banks are expected to maintain their NII guidance, as the sustainability of loan growth remains uncertain and the interest rate environment is increasingly volatile. Conversely, Truist Financial (TFC.US) may signal a downward bias in its full-year outlook, as its net interest margin expansion relies more heavily on interest rate cuts, and management had previously assumed an earlier rate-cutting timeline than market consensus.
Deutsche Bank's first-quarter earnings per share (EPS) estimates for the 15 large banks under its coverage are on average about 1% above consensus. The bank's estimates are most above consensus for Goldman Sachs, Huntington Bank, and KeyCorp (KEY.US), while most below consensus for M&T Bank (MTB.US). Deutsche Bank's preferred stocks ahead of earnings are Huntington Bank, PNC Financial Services Group, and U.S. Bancorp, for the following reasons:
Huntington Bank has underperformed recently due to cost concerns, uncertainty around merger valuation, and market worries about potential large-scale acquisitions. However, Deutsche Bank remains positive on the stock, citing its strong standalone growth prospects, reasonable merger assumptions, better-than-perceived credit quality, and confidence that management will avoid large acquisitions during periods of low valuation. The stock currently trades at a 12%–13% discount to peers based on 2026–2027 consensus estimates, with much of the pessimism already priced in, creating a potential investment opportunity.
PNC Financial Services Group has high exposure to commercial and industrial loan growth, which accounts for 55%–60% of its loan portfolio, as well as capital markets activities, contributing 6%–7% of revenue. The bank has also been one of the top performers in credit risk management, with asset quality consistently leading peers since the global financial crisis.
U.S. Bancorp has met or exceeded guidance for three consecutive quarters, a trend expected to continue in the first quarter of 2026. It is also viewed as one of the more credit-defensive names among Deutsche Bank's coverage, an advantage amid rising credit concerns. Despite this, the stock trades at about a 6% discount to 2026 consensus estimates and is roughly in line for 2027.
Key themes for the quarter include revenue trends reflecting largely stable NII sequentially, with strong commercial loan growth offsetting a two-day shorter quarter and seasonal declines in credit card revenue. Capital markets performance is robust, with investment banking revenue expected to rise 20% and trading revenue up 15%, while other fee income remains in line. Additional trends include generally stable asset quality—despite some volatility in losses—well-controlled costs, and a slight increase in share repurchases, influenced by lower stock prices during the quarter.
NII is projected to reach the upper end or exceed guidance, primarily driven by better-than-expected loan growth. Sequentially, NII is expected to be largely flat, as loan growth offsets the impact of fewer days in the quarter. Net interest margin is forecast to increase by 2 basis points. Year-over-year, NII for Deutsche Bank's coverage is expected to grow 8%, the strongest growth since the second quarter of 2023.
In mid-March, several banks provided updates on macroeconomic conditions, quarterly trends, and guidance. Following further communication with these institutions, Deutsche Bank has updated its earnings forecasts. Overall, full-year 2026 estimates remain largely unchanged. The bank has also introduced initial 2027–2028 forecasts for most covered banks, with 2027 estimates in line with consensus and 2028 estimates about 1% above.
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