The broad indices ended relatively flat, but the KBW Bank Index (I:BKX) rose 0.7% to close at 70.14, after Automated Data Processing said the U.S. economy had added 139,000 nonfarm private-sector jobs during February. That number was down from 175,000 in January, while also falling well short of the consensus estimate of 160,000, among economists polled by Reuters.
The unusually cold and stormy weather in many parts of the United States continued during ADP's February survey period. But this could mean better numbers are just around the corner. In a morning report to clients, Deutsche Bank's equity research team wrote, "If weather dampens hiring there is usually a large snapback in ensuing months."
In another disappointing report on Wednesday, the institute for Supply Management said its non-manufacturing index for February had declined to 51.6%, down from 54.0% in January. Economists had expected the NMI to come in at 53.8%. A reading above 50% indicates expansion.Bank of America's shares have 11% this year, following a 34.5% return during 2013. The shares trade for 1.3 times tangible book value, according to Thomson Reuters Bank Insight, and for 10.6 times the consensus 2015 earnings estimate of $1.62 a shar6e. That price-to-forward-earnings valuation is the second highest among the "big four" U.S. banks, even though Bank of America had the lowest returns on average tangible common equity (ROTCE) among the group over the past two years. Bank of America's 2013 ROTCE was 7.94%, improving from 2.96% in 2012, according to Thomson Reuters Bank Insight. Here are all of the same numbers for the rest of the big four, followed by some interesting numbers in Bank of America's favor.
- Citigroup's (C - Get Report) shares closed at $49.42 Wednesday. The shares are down 2% this year, after a 32% return during 2013. The shares trade for 0.9 times tangible book value, and for 8. times the consensus 2015 EPS estimate of $5.73. Citi's 2013 ROTCE was 8.20%, improving from 4.80% during 2012.
- Shares of JPMorgan Chase (JPM) closed at $58.16 Wednesday. The stock is up slightly this year, following a 37% return in 2013. The shares trade for 1.4 times tangible book value, and for 9.2 times the consensus 2015 EPS estimate of $6.35. The bank's ROTCE for 2013 was 11.92%, down from 14.72% the previous year.
- Wells Fargo (WFC) closed at $47.07 Wednesday. The shares have returned 4% this year, following a 37% return during 2013. The shares trade for 2.0 times tangible book value, and for 11.1 times the consensus 2015 EPS estimate of $4.25. Wells Fargo's ROTCE for 2013 was a strong 17.72%, increasing from 16.70% in 2012.