What a difference a year makes.
A year ago, bank stocks were being pummeled for their perceived exposure to the coronavirus pandemic, pushing the 24-member KBW Bank Index down by as much as 50% from their start of 2020.
This year, analysts have been busy revising the industry's earnings estimates upwards, thanks in part to expectations that banks will release some of the tens of billions of dollars in loan loss reserves set aside in 2020 and that reopening economies will drive spending and loan growth.
In fact, Barclays analyst Jason Goldberg boosted first quarter 2021 earnings estimates by a median 16% last week for banks in his coverage, driven by reserve releases and his forecast for strong investment banking and trading results. He now thinks per share earnings will jump by a median 80% compared to the first quarter of 2020, when banks were forced to set aside money for expected loan losses.