E*TRADE Financial CorporationNASDAQ
Mon, Dec. 5, 12:40 PM
- The FRBNY's William Dudley isn't concerned about the post-election jump in rates at the long end of the curve, and says the Fed is about to start following suit at the short end.
- Even the dovish Charles Evans from the Chicago Fed admits inflation is getting closer to the central bank's target, and the labor market is close to full employment.
- The 10-year Treasury yield had moved as high as 2.45%, but has pulled back to 2.40%, still up 1.5 basis points on the session.
- On the regulatory front, Fed Governor Daniel Tarullo on Friday set himself up as the chief defender of the current bank regulatory regime, but whether his voice will be heard is a different story given the incoming administration, which looks to be staffed with those favoring a far lighter regulatory hand.
- Financial sector stocks today are about doubling the S&P 500's 0.5% advance.
- TBTF banks: Bank of America (BAC +2.3%), Citigroup (C +1.8%), JPMorgan (JPM +1.3%), Wells Fargo (WFC +0.9%), Goldman Sachs (GS +1.7%), Morgan Stanley (MS +0.4%)
- Regional lenders: U.S. Bancorp (USB +0.7%), PNC Financial (PNC +0.4%), KeyCorp (KEY -0.8%), Fifth Third (FITB +0.5%)
- Insurers: MetLife (MET +0.3%), Lincoln National (LNC), AIG (AIG +0.2%)
- Brokerage: Schwab (SCHW +0.9%), E*Trade (ETFC +0.9%)
- Custodial banks: State Street (STT +0.5%), Northern Trust (NTRS +1%)
- Private equity: Blackstone (BX +0.9%), KKR (KKR +1%)
- Asset Management: BlackRock (BLK +0.1%), Franklin Resources (BEN +0.5%), Affiliated Managers (AMG +1.8%)
Mon, Nov. 14, 8:18 AM
- ETFC October DARTs of 168.7K were up 2.1% from September and 16.7% from a year ago.
- Net new brokerage accounts slipped a hair vs. a big gain in September. End-of-period brokerage accounts were roughly flat from last month, and up 7.3% Y/Y.
- Customer assets of $300.4B were down 2.1% M/M, and up 1.9% Y/Y.
- Source: Press release
Thu, Nov. 10, 11:03 AM
- For now, the 10-year Treasury yield is holding onto the huge gain in posted yesterday, up two basis points today to 2.086%. TLT -0.4%, TBT +0.8%. Fed Funds futures have priced in about a 100% chance of a December rate hike.
- The yield curve has shifted both higher and steeper - pure manna for the companies that borrow short and lend long. There's also a new sheriff coming to town, and bank investors are no doubt mulling an eased regulatory regime. KBE +2.45%, KBE +2.4%
- Bank of America (BAC +3.5%), Wells Fargo (WFC +4.5%), JPMorgan (JPM +3.1%). Underperformers among the TBTF players: Citigroup (C +1.1%), Goldman (GS +1.1%)
- Regional banks: Regions (RF +4.2%), PNC Financial (PNC +3.3%), Fifth Third (FITB +1.7%). Online brokers: E*Trade (ETFC +2.9%), Schwab (SCHW +2.8%), Ameritrade (AMTD +2.6%), Interactive Brokers (IBKR +2.7%)
Tue, Nov. 1, 11:02 AM
- According to DealReporter, LPL Financial (LPLA +1.6%) is in talks with private-equity bidders. There's also the idea, says DealReporter, that E*Trade (ETFC +0.4%) could have interest following TD Ameritrade's purchase of Scottrade.
- LPL in October hired Goldman Sachs to assist with strategic options, including a possible sale.
Wed, Oct. 26, 11:38 AM
- First off, TD Ameritrade's (NASDAQ:AMTD) deal to buy Scottrade likely means any tie-up between AMTD and E*Trade (NASDAQ:ETFC) is likely put off by at least 18 months, says analyst Brian Bedell.
- Other takeaways are that the value of online brokerage is greater thanks to the recent DOL fiduciary rules, and that pricing competition is likely to ratchet higher.
- For E*Trade, new management has asked for about two years to execute its growth strategy. If things don't work out by then, it would consider a sale, so the AMTD purchase gives management that time. Growth may come even easier, suggests Bedell, as E*Trade could lure some Scottrade or AMTD customers to its platform. Still, the additional price competition has Bedell trimming his 2017 and 2018 EPS estimates by 1% and 2%, respectively.
- As for Schwab (NYSE:SCHW), Bedell doesn't see it participating in the consolidation trend, but he does anticipate the company being more aggressive on pricing, given its scale advantages and far lower reliance on trading revenue. Schwab, he says, could offer free trading for clients transferring large balances, and still make money on the deal. He nevertheless cuts his EPS estimates for 2017 and 2018 by 1% each.
Fri, Oct. 21, 11:49 AM
- Reiterating his Outperform rating on E*Trade (ETFC +4.1%) post-earnings, Wells Fargo's Chris Harris takes note of the large number of possible positive catalysts.
- Among them: 1) Continued loan loss reserve releases, 2) better-than-expected expense management, 3) bank balance sheet growth, 4) OptionsHouse integration going better than planned, 5) Higher interest rates.
- Harris: "There seems to be a renewed sense of urgency with management setting an 18-24 month timeframe for accomplishing its growth objectives. If unsuccessful, it noted it may consider other strategic options including a sale of the company."
Thu, Oct. 20, 4:23 PM
- Q3 net income of $139M or $0.51 per share includes $19M or $0.07 per share related to CEO's exit, restructuring and other acquisition-related activities, and benefit to provision for loan losses.
- Net revenue of $486M vs. adjusted net revenue of $431M a year ago.
- New CEO Karl Roessner: "We have a handful of clear-cut objectives around which we have aligned: First, to swiftly and flawlessly integrate OptionsHouse ... second, to reclaim our position as a trading powerhouse ... third, to improve our marketing to more effectively engage with customers and prospects."
- Conference call at 5 ET
- Previously: E*TRADE Financial beats by $0.11, beats on revenue (Oct. 20)
- ETFC +0.5% after hours
Thu, Oct. 20, 4:15 PM
Wed, Oct. 19, 5:35 PM
Thu, Oct. 13, 7:36 AM
- Catching an upgrade to Buy from Neutral is TD Ameritrade (NASDAQ:AMTD), with analyst Michael Carrier seeing upside from higher interest rates, and other factors like M&A (rumors of Scottrade interest) and competitive pricing. The $43 price target is up from $33, and suggests another 20% upside from current levels.
- Also upgraded is Schwab (NYSE:SCHW).
- Downgraded to Neutral from Buy is E*Trade (NASDAQ:ETFC).
Wed, Oct. 5, 3:27 PM
- The continued rise in interest rates - the 10-year yield today breaching 1.70% - is giving additional fuel to the financial sector rally.
- The XLF's 1.7% advance today puts it in a tie with the energy sector's XLE. The S&P 500 is up just 0.45%.
- Banks, insurers, and brokers are all sharply ahead as investors envision the return of spread income. Even Wells Fargo (WFC +2.8%) is in the green - it's in fact atop the TBTF movers.
- Other gainers: Goldman Sachs (GS +2.4%), Morgan Stanley (MS +1.7%), U.S. Bancorp (USB +2.1%), SunTrust (STI +2.5%), PNC Financial (PNC +1.3%), E*Trade (ETFC +2.1%), Voya Financial (VOYA +4.7%), Lincoln National (LNC +2.4%).
Fri, Sep. 30, 8:33 AM
- TD Ameritrade (NASDAQ:AMTD) had a big move yesterday after Bloomberg reported Scottrade has put itself on the block, with Ameritrade as a possible suitor.
- Don't forget possible interest from Schwab (NYSE:SCHW) and E*Trade (NASDAQ:ETFC), says Wells Fargo, which believes a deal would be accretive by double-digit levels.
- That said, Ameritrade could be the most logical buyer, given that E*Trade just closed on a purchase (OptionsHouse) and Schwab has sought to place less emphasis on trading.
- Wells keeps its Outperform rating on E*Trade and Market Perform ratings on Schwab and Ameritrade.
Mon, Sep. 26, 1:03 PM
- The industry is facing three disruptive threats, says analyst Michael Cyprys: Competition for customer assets/activity, a growing regulatory burden, and technologies that can transform business models.
- Advice is the key, he says, and moving into this segment opens up a $22T wealth pool for the brokers.
- His favorite is Charles Schwab (NYSE:SCHW), as it has the most diversified revenue streams and most EPS upside from current rates. He starts the stock at Overweight with a $37 price target.
- His least favorite is LPL Financial (NASDAQ:LPLA), thanks to a lack of clarity on regulatory issues and the business model.
- E*Trade (NASDAQ:ETFC) and Ameritrade (NASDAQ:AMTD) are Equal Weight.
Wed, Sep. 21, 11:20 AM
- The SEC just charged Leon Cooperman with insider trading over Atlas Pipeline Partners, and Omega holdings such as Alitsource Portofolio, Navient, Aercap, and Tribune Media have knee-jerked sharply lower.
- A check of other top Omega holdings: First Data (FDC -1.3%), Allergan (AGN -0.9%), AIG (AIG +0.4%), Walgreens (WBA -0.6%), Dow Chemical (DOW), United Continental (UAL -0.7%), Ashland (ASH +0.3%), Chimera Investment (CIM -0.4%), Motorola (MSI +0.1%), HRG Group (HRG -1%), Microsoft (MSFT +1%), E*Trade (ETFC), New Residential (NRZ -1%), OneMain Holdings (OMF -2.3%), PVH (PVH +0.4%), UnitedHealth (UNH +0.7%), MGM Resorts (MGM -0.5%), New Media (NEWM -1.9%), Dish Network (DISH +0.5%), Synchrony Financial (SYF +1%), Eastman Chemical (EMN +0.3%).
- Previously: Cooperman holdings head south after insider trading charge (Sept. 21)
- Previously: Leon Cooperman charged with insider trading (Sept. 21)
Wed, Sep. 21, 10:14 AM
- Credit Suisse had been restricted from coverage due its role as an advisor to E*Trade (NASDAQ:ETFC) on a recent acquisition (OptionsHouse).
- Picking coverage back up with an Outperform rating and hiked price target (to $33 from $30), analyst Christian Bolu says the company "is at another critical inflection point," after the lack of core business growth led to the firing of the CEO last week.
- New management has promised 2-3% incremental growth, or it will consider a sale of the company, notes Bolu.
- Mulling a takeout by TD Ameritrade (NASDAQ:AMTD) or Schwab (NYSE:SCHW), Bolu says it would likely be at little to no premium to the current stock price as there's not much strategic rationale, and there are likely sizable revenue dis-synergies.
- Bolu nevertheless lifts his 2018 EPS estimate to $1.90 from $1.80 thanks to the OptionsHouse acquisition. The $33 price target is based on 15x long-term earnings power of $2 per share, plus about $2.60 per share of the deferred tax asset.
Wed, Sep. 14, 8:47 AM
- I don't think it's unreasonable to expect material improvement over the next 12-24 months, says E*Trade (NASDAQ:ETFC) Executive Chairman Rodger Lawson, presenting at a conference one day after the firing of CEO Paul Idzik.
- While leadership feels at the moment it's best to remain an independent company, a sale option wouldn't be off the table if growth doesn't improve.
- Said growth could come from acquisitions, says Lawson, but don't expect the company to make expensive buys just to drive account numbers higher.