Bank earnings are around the corner with many commercial banks set to report on Friday, January 12. Among them, Morgan Stanley (MS) has fallen out of favor amongst analysts and investors — becoming the "least-loved" bank stock. On the other hand, JPMorgan (JPM) has become a stand-out name in the banking sector.

Yahoo Finance’s Jared Blikre breaks down bank earnings expectations, highlighting bank stocks' overall performances in 2023.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Eyek Ntekim.

Video Transcript

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- Bank earnings, they are fast approaching, and there's new stock that's the least loved heading into its results. Yahoo Finance's Jared Blikre here with the details and the reveal. Who is it, Jared?

JARED BLIKRE: Morgan Stanley. New CEO, there are some things to prove there. Just taking a look at what happened with the banks today. In the stock market, lots of red here. But I thought it would be interesting to maybe give a longer term comparison and then get into what, we're expecting for earnings. And a lot of these banks are going to be starting with JP Morgan to report results early this week.

You can see JP Morgan is up 24% over the last year. It is the best performer among the big, big US banks here. And as far as Wells Fargo concerned, Citigroup and Morgan Stanley, some of those have been changing places with respect to analysts' expectations. And in fact, Morgan Stanley, as you said is now, the least loved, but it just traded place with Citigroup.

And that happened with an HSBC analysts kind of flipping those to within their own ratings. Also, I should add Wolfe Research and Wells Fargo have increased their bets for Morgan Stanley. They have upgraded Morgan Stanley within the last few weeks.

And I did mention there is a new CEO at the helm, helm his name is Ted Picks. And there's going to be a lot to learn from him on the earnings call. And part of that has to do with the fact that it's January and we have the year look ahead update. But some of this has to do with his strategic goals, and they want to get his take on investment manage revenue and how that's going to play into corporate results.

As far as what the Street is expecting, they're looking for EPS at $1.15 and that would be down 12% from the fourth quarter of 2022, revenue up 1% per consensus. When it comes to trading, that has been a big part of the analysts announcement-- excuse me-- a big part of the results here. FICC trading is expected to be up 5%, versus the fourth quarter in 2022. Equities up 4%, and then their fees are expected to be down 11%, and that says M&A is down 28%.

So we M&A has really floundered over the last few years, but we have seen it recently uptick. And let me just show you this. This is a comparison of Morgan Stanley versus Goldman Sachs, I'm going to pivot here. Goes back 20 years, so predates the global financial crisis, you can see Morgan Stanley took a much bigger hit over the crisis and has struggled to come back, but has recently pushed above those predecessor highs or those prior highs there.

Meanwhile, Goldman Sachs has done a lot better. However, you take a look at Morgan Stanley versus Citigroup. Citigroup has been dead money for quite some time, down 90% from those levels. And kind of an instructive lesson for anybody who's still holding Peloton for instance, and some of these other stocks like Rivian and some others from the pandemic. They have a lot of overhang. And just to say that a lot can happen over 10 years without your stock.

So just be careful who you park your money with now that we are coming out of finally that dreaded bear market from last year.