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Exclusive News
Big Bank Earnings Gave Financials a Lift, But Wall Street Is Still CautiousSubmitted by Jessica Mitacek. Published: 4/22/2026. 
Key Points
- Goldman Sachs, Wells Fargo, Citigroup, and JPMorgan all posted Q1 2026 earnings beats, signaling potential undervaluation across major financial stocks.
- The financials sector has shed nearly 4% year-to-date in 2026 but has rebounded more than 7% over the past month amid strong bank earnings.
- Analysts remain cautious despite the earnings beats, with mostly conservative price targets and low expectations for Federal Reserve rate cuts ahead.
- Special Report: Elon Musk already made me a “wealthy man”
The financials sector has not been kind to investors this year. Following a strong 2025, when it finished third in the index, the group has been the worst performer among the S&P 500’s 11 sectors so far in 2026, posting a year-to-date (YTD) loss of nearly 4% (as measured by the Financial Select Sector SPDR Fund (NYSEARCA: XLF)).
But over the past month, financials have appeared to turn a corner after posting a gain of over 7%. That momentum is partly due to the lead-up to big banks’ earnings week, which began on April 13 when Goldman Sachs (NYSE: GS) reported first-quarter results. For investors watching the sector for a potential bounce, here’s what we learned from the premier financial institutions. Goldman Sachs: Earnings Growth Hints at Undervalued SharesGoldman Sachs' Q1 2026 results may be enough to finally help the 157‑year‑old investment bank break even for the year. That builds on recent momentum: GS shares gained more than 16% from their YTD low on March 13 as they rallied into last week's earnings release. The firm reported earnings per share (EPS) of $17.55, beating analyst expectations of $15.92, and revenue of $17.23 billion, topping analyst forecasts of $16.66 billion. While both figures pleased shareholders, the revenue beat was notable, showing a 14.4% year‑over‑year (YOY) increase. The earnings beat marked the bank’s 11th consecutive quarter of exceeding estimates, with CEO David Solomon noting in his earnings call comments that EPS, revenue, and net income were all the second highest in the company’s history. Notably, Goldman Sachs’ Global Banking & Markets segment and its Asset & Wealth Management segment reached record revenues and record assets under management, respectively. Solomon did flag near‑term headwinds — including geopolitical unrest and uncertainty about how higher energy prices could affect growth — but said the bank “is extremely well‑positioned to navigate this current environment.” Goldman Sachs’ earnings are forecast to grow nearly 11% over the next year, from $47.12 per share to $52.07 per share. Given its current and projected earnings growth, the stock looks increasingly undervalued. Big Banks Mirror Goldman’s Lead, Post Notable Earnings Beats Following Goldman Sachs’ success, Wells Fargo & Company (NYSE: WFC), Citigroup (NYSE: C), and JPMorgan Chase & Co. (NYSE: JPM) reported on April 14, with all three posting earnings beats. While only Wells Fargo missed on revenue, the bank still delivered top‑line growth of 6.4% YOY. Revenue for JPMorgan and Citigroup rose 10% and 14.1% YOY, respectively. For each firm, the earnings beat marked the ninth consecutive quarter of EPS exceeding analyst expectations. More importantly—as with Goldman Sachs—these Q1 beats suggest potential undervaluation when compared with each stock’s P/E multiple and projected earnings growth over the next year:
Wells Fargo: P/E 14.67, expected EPS growth of 16.64% Citigroup: P/E 17.26, expected EPS growth of 25.5% JPMorgan: P/E 17.31, expected EPS growth of 7.29% Citigroup looks particularly attractive after four of its five core businesses delivered double‑digit revenue growth, and management signaled confidence by repurchasing $6.3 billion of shares in Q1 as part of a $20 billion buyback plan. But, like Solomon, Citigroup CEO Jane Fraser acknowledged that fallout from the Iran war increases the risk of inflation and “will likely cause central banks to lean towards more restrictive monetary policies.” Wall Street Remains Reserved on FinancialsDespite the earnings beats, analysts remain cautiously optimistic on those four bank stocks, assigning mostly conservative price targets. Wells Fargo and Citigroup both carry consensus Moderate Buy ratings, but only Wells Fargo’s average 12‑month price target implies a potential double‑digit gain from current levels. Low expectations for additional Federal Reserve rate cuts mean banks can continue improving net interest margins while rates remain steady. Consumer spending also appears resilient, according to several banks’ earnings calls. If the earnings week ends with a clean sweep of beats, it could be the catalyst financials need to change the narrative for the remainder of 2026. |
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