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Will Zelle Soon Be Coming To Retail Checkout Lanes?
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Sending and receiving money back and forth has never been easier in today’s world. We now have the ability to make these transfers with a multitude of mobile applications, and recently, there has been a new player taking the payments arena by storm – Zelle.
Zelle is an application that provides peer-to-peer money transfers, simplifying the process of making payments and transferring money. What’s unique about Zelle is that it allows money to be transferred directly through bank accounts, a feature that other payment applications do not have. The service gained widespread use during the pandemic as people shifted away from traditional ways of transferring money, such as checks.
Zelle is under the control of Warning Services, LLC, a privately-held financial services company owned by several massive banks, including Bank of America (BAC - Free Report) , Wells Fargo (WFC - Free Report) , and JPMorgan Chase (JPM - Free Report) . Recently, according to a report from the WSJ, banks are now weighing the option of implementing Zelle at the checkout line of big retailers, challenging Visa (V - Free Report) and Mastercard (MA - Free Report) . The implementation of Zelle would allow banks to set their own rules and fees, something that Visa and Mastercard currently have control over.
The possibility of losing their established stances in this area does not bode well, and investors took note of that; Visa and Mastercard shares slid 3% and 2.7% on Wednesday following the news. However, not all of Zelle’s owners are sold on this idea just yet. Bank of America and Wells Fargo have both backed the expansion of Zelle, but JPMorgan is still on the fence.
An enormous issue surrounding Zelle is that there has been widespread fraud across the app, and to the dislike of many, Zelle claims that fraud is not its issue to deal with but rather the banks’ problem. Additionally, the app tracked over $490 billion in transactions in 2021, double PayPal’s (PYPL - Free Report) Venmo service, further shedding light on how massive its fraud problem can become.
While nothing permanent has happened yet in terms of implementation, I think this is the first step towards a significant shift in how money is transferred and received. Consumers are tired of several day-long transfers and demanding much quicker bank transactions, which is precisely what Zelle provides. However, the fraud issue must be curbed moving forward to implement the service successfully.
Bank of America, Wells Fargo, and JPMorgan Chase, three of the major owners of Zelle, are all slated to kick off the banks’ earnings reports next week. Let’s preview the expected earnings and analyze a few key metrics to see where they currently stand rolling into next week.
Bank of America
Bank of America (BAC - Free Report) is one of the largest financial holding companies in the United States, controlling $3.17 trillion worth of assets as of December 31st, 2020. It offers a diverse range of banking and non-banking financial services and products through more than 4000 financial centers.
Q1 earnings estimates have been coming down over the last 60 days for BAC. In total, five analysts have downwardly revised their Q1 estimates, bringing the earnings estimate down to $0.77 per share and reflecting a year-over-year decrease in earnings of 11%. On the contrary, the current year EPS estimate has inched up 0.31% to $3.26 per share but still reflects a year-over-year decline of nearly 9%. Additionally, heading into Q1 earnings, BAC has a -1.4% ESP Score.
Image Source: Zacks Investment Research
The company currently has a four-quarter trailing average EPS surprise of 23%, and in its latest quarter, Bank of America beat estimates by nearly 8%. The Zacks Consensus Estimate for Q1 sales currently sits at $23.3 billion, a positive 2% year-over-year increase. Furthermore, the company expects to expand its bottom line by 7% over the next three to five years.
BAC is currently a Zacks Rank #3 (Hold) with an overall VGM Score of a C.
Bank of America Corporation Price, Consensus and EPS Surprise
Wells Fargo & Company (WFC - Free Report) is another massive financial services company in the United States with more than $1.9 trillion in assets as of December 31st, 2021. Through more than 4500 retail bank branches, WFC provides banking, insurance, mortgage, and brokerage services.
Analysts have been revising their Q1 estimates downward over the last 60 days, pushing the Consensus Estimate Trend down 3.5% to $0.83 per share. The revised Q1 EPS estimate reflects a year-over-year earnings decrease of nearly 21%, and the current year’s revised EPS estimate of $4.00 represents a 19% year-over-year decrease. Rolling into Q1, WFC has a -7.8% ESP Score.
Image Source: Zacks Investment Research
Wells Fargo & Company beat earnings estimates by nearly 27% in its latest quarter, and over its last four earnings reports, the company has an average EPS surprise of almost 35%. The current year's $73.5 billion sales estimate reflects a year-over-year top-line decrease of 6%, with the Q1 sales estimate representing a 1.5% year-over-year decrease. Additionally, WFC’s bottom line is forecasted to grow 10% over the next three to five years.
WFC is currently a Zacks Rank #3 (Hold) with an overall VGM Score of an F.
Wells Fargo & Company Price, Consensus and EPS Surprise
JPMorgan Chase & Co. (JPM - Free Report) is the largest bank in the United States, with $3.74 trillion in assets and operations across more than 60 countries as of December 31st, 2021.
Like BAC and WFC, analysts have been downwardly revising their estimates over the last 60 days. Six downward revisions have come in total for Q1, pushing the quarterly earnings estimate down by nearly 4% to $2.71 per share, a year-over-year decrease of a notable 40%. Additionally, the current year’s EPS estimate of $10.97 displays a year-over-year earnings decrease of almost 30%.
Image Source: Zacks Investment Research
The company has performed well over its last four quarters, acquiring an average EPS surprise of 26% and beating estimates by nearly 12% in its latest quarter. The Q1 sales estimate of $30.5 billion represents a decrease of almost 6% compared to the previous year’s quarter, and the current-year revenue estimates reflect a marginal 0.85% increase year-over-year. Going into its next quarterly report next week, JPM has an ESP Score of -0.04%.
JPM is currently a Zacks Rank #3 (Hold) with an overall VGM Score of a D.
JPMorgan Chase & Co. Price, Consensus and EPS Surprise
Image: Bigstock
Will Zelle Soon Be Coming To Retail Checkout Lanes?
Sending and receiving money back and forth has never been easier in today’s world. We now have the ability to make these transfers with a multitude of mobile applications, and recently, there has been a new player taking the payments arena by storm – Zelle.
Zelle is an application that provides peer-to-peer money transfers, simplifying the process of making payments and transferring money. What’s unique about Zelle is that it allows money to be transferred directly through bank accounts, a feature that other payment applications do not have. The service gained widespread use during the pandemic as people shifted away from traditional ways of transferring money, such as checks.
Zelle is under the control of Warning Services, LLC, a privately-held financial services company owned by several massive banks, including Bank of America (BAC - Free Report) , Wells Fargo (WFC - Free Report) , and JPMorgan Chase (JPM - Free Report) . Recently, according to a report from the WSJ, banks are now weighing the option of implementing Zelle at the checkout line of big retailers, challenging Visa (V - Free Report) and Mastercard (MA - Free Report) . The implementation of Zelle would allow banks to set their own rules and fees, something that Visa and Mastercard currently have control over.
The possibility of losing their established stances in this area does not bode well, and investors took note of that; Visa and Mastercard shares slid 3% and 2.7% on Wednesday following the news. However, not all of Zelle’s owners are sold on this idea just yet. Bank of America and Wells Fargo have both backed the expansion of Zelle, but JPMorgan is still on the fence.
An enormous issue surrounding Zelle is that there has been widespread fraud across the app, and to the dislike of many, Zelle claims that fraud is not its issue to deal with but rather the banks’ problem. Additionally, the app tracked over $490 billion in transactions in 2021, double PayPal’s (PYPL - Free Report) Venmo service, further shedding light on how massive its fraud problem can become.
While nothing permanent has happened yet in terms of implementation, I think this is the first step towards a significant shift in how money is transferred and received. Consumers are tired of several day-long transfers and demanding much quicker bank transactions, which is precisely what Zelle provides. However, the fraud issue must be curbed moving forward to implement the service successfully.
Bank of America, Wells Fargo, and JPMorgan Chase, three of the major owners of Zelle, are all slated to kick off the banks’ earnings reports next week. Let’s preview the expected earnings and analyze a few key metrics to see where they currently stand rolling into next week.
Bank of America
Bank of America (BAC - Free Report) is one of the largest financial holding companies in the United States, controlling $3.17 trillion worth of assets as of December 31st, 2020. It offers a diverse range of banking and non-banking financial services and products through more than 4000 financial centers.
Q1 earnings estimates have been coming down over the last 60 days for BAC. In total, five analysts have downwardly revised their Q1 estimates, bringing the earnings estimate down to $0.77 per share and reflecting a year-over-year decrease in earnings of 11%. On the contrary, the current year EPS estimate has inched up 0.31% to $3.26 per share but still reflects a year-over-year decline of nearly 9%. Additionally, heading into Q1 earnings, BAC has a -1.4% ESP Score.
Image Source: Zacks Investment Research
The company currently has a four-quarter trailing average EPS surprise of 23%, and in its latest quarter, Bank of America beat estimates by nearly 8%. The Zacks Consensus Estimate for Q1 sales currently sits at $23.3 billion, a positive 2% year-over-year increase. Furthermore, the company expects to expand its bottom line by 7% over the next three to five years.
BAC is currently a Zacks Rank #3 (Hold) with an overall VGM Score of a C.
Bank of America Corporation Price, Consensus and EPS Surprise
Bank of America Corporation price-consensus-eps-surprise-chart | Bank of America Corporation Quote
Wells Fargo & Company
Wells Fargo & Company (WFC - Free Report) is another massive financial services company in the United States with more than $1.9 trillion in assets as of December 31st, 2021. Through more than 4500 retail bank branches, WFC provides banking, insurance, mortgage, and brokerage services.
Analysts have been revising their Q1 estimates downward over the last 60 days, pushing the Consensus Estimate Trend down 3.5% to $0.83 per share. The revised Q1 EPS estimate reflects a year-over-year earnings decrease of nearly 21%, and the current year’s revised EPS estimate of $4.00 represents a 19% year-over-year decrease. Rolling into Q1, WFC has a -7.8% ESP Score.
Image Source: Zacks Investment Research
Wells Fargo & Company beat earnings estimates by nearly 27% in its latest quarter, and over its last four earnings reports, the company has an average EPS surprise of almost 35%. The current year's $73.5 billion sales estimate reflects a year-over-year top-line decrease of 6%, with the Q1 sales estimate representing a 1.5% year-over-year decrease. Additionally, WFC’s bottom line is forecasted to grow 10% over the next three to five years.
WFC is currently a Zacks Rank #3 (Hold) with an overall VGM Score of an F.
Wells Fargo & Company Price, Consensus and EPS Surprise
Wells Fargo & Company price-consensus-eps-surprise-chart | Wells Fargo & Company Quote
JPMorgan Chase & Co.
JPMorgan Chase & Co. (JPM - Free Report) is the largest bank in the United States, with $3.74 trillion in assets and operations across more than 60 countries as of December 31st, 2021.
Like BAC and WFC, analysts have been downwardly revising their estimates over the last 60 days. Six downward revisions have come in total for Q1, pushing the quarterly earnings estimate down by nearly 4% to $2.71 per share, a year-over-year decrease of a notable 40%. Additionally, the current year’s EPS estimate of $10.97 displays a year-over-year earnings decrease of almost 30%.
Image Source: Zacks Investment Research
The company has performed well over its last four quarters, acquiring an average EPS surprise of 26% and beating estimates by nearly 12% in its latest quarter. The Q1 sales estimate of $30.5 billion represents a decrease of almost 6% compared to the previous year’s quarter, and the current-year revenue estimates reflect a marginal 0.85% increase year-over-year. Going into its next quarterly report next week, JPM has an ESP Score of -0.04%.
JPM is currently a Zacks Rank #3 (Hold) with an overall VGM Score of a D.
JPMorgan Chase & Co. Price, Consensus and EPS Surprise
JPMorgan Chase & Co. price-consensus-eps-surprise-chart | JPMorgan Chase & Co. Quote