Equities

JPMorgan Q2 Earnings: $4.18/Share, $42B Revenue Watched

JPMorgan expected to report $4.18 EPS on $42.16B revenue, stock up 22% in 2024, analysts eye net interest income.

By Athena Xu

7/11, 13:50 EDT
JP Morgan Chase & Co.
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Key Takeaway

  • JPMorgan is expected to report Q2 earnings of $4.18 per share on $42.16 billion in revenue, with analysts watching net interest income and forward guidance.
  • The stock has risen 22% in 2024; CEO Jamie Dimon warns of inflation, geopolitical risks, and Fed policies impacting future outlook.
  • Analysts anticipate strong investment banking activity and potential upgrades to net interest income guidance, despite a slight decrease in net interest margin.

Earnings Expectations

The second-quarter earnings season is set to commence on Friday with results from major banking institutions, including JPMorgan Chase. Analysts surveyed by LSEG anticipate JPMorgan to report earnings of $4.18 per share on $42.16 billion in revenue. Wall Street is also closely monitoring net interest income and forward guidance. Barclays analyst Jason Goldberg commented, "We are attracted to JPM’s competitive position and believe it has addressed a great deal of its litigation concerns." He added that higher loan growth and capital markets could drive potential earnings upside.

Stock Performance and CEO Commentary

JPMorgan's stock has performed well in 2024, rising 22%. CEO Jamie Dimon has been vocal about potential threats, warning in April about sticky inflation, geopolitical conflicts, and Federal Reserve policies. Analysts are particularly interested in the bank's 2024 outlook, especially regarding net interest income in a higher-for-longer rate environment. Earlier this year, JPMorgan guided for $91 billion in net interest income, and Bank of America's Ebrahim Poonawala suggested that another upgrade might be possible. The firm has a $226 price target on the stock, indicating nearly 9% upside from Wednesday’s close.

Financial Metrics and Analyst Insights

Barclays analyst Jason Goldberg expects a slight decrease in net interest income for the second quarter due to a compression in net interest margin. Last year, the company posted $21.9 billion in net interest income for the same period. Despite expectations for seasonally lower trading, Goldberg anticipates strong investment banking activity and net interest income to sustain positive momentum. "Looking out, we expect JPM to point toward stabilizing NII in 2024 with increased expenses on continued investments," he said. Wells Fargo analyst Mike Mayo expects realized Visa gains to provide upside to second-quarter EPS estimates, resulting in an $8 billion pretax gain, partially offset by a $1 billion foundation contribution and building loan loss reserves.

Market Position and Future Prospects

JPMorgan is widely regarded as a highly diversified bank and a market leader in consumer banking, commercial lending, investment banking, and wealth management. Redburn Atlantic’s John Heagerty stated, "JPMorgan is simply regarded as the highest quality bank in the United States." Heagerty views the uncertain macroeconomic backdrop as a potential opportunity for JPMorgan to leverage its strong balance sheet to acquire smaller banks. Analysts are also keeping an eye on the bank's liquidity and real-estate losses, given the broader concerns in the financial system.

Street Views

  • Jason Goldberg, Barclays (Bullish on JPMorgan Chase):

    "We are attracted to JPM’s competitive position and believe it has addressed a great deal of its litigation concerns. We see the greatest sources of potential earnings upside being driven by higher loan growth and capital markets."

  • Richard Ramsden, Goldman Sachs (Neutral on JPMorgan Chase):

    "Analysts will monitor JPMorgan’s 2024 outlook, particularly the trajectory for net interest income given the expectations for a higher-for-longer rate environment."

  • Ebrahim Poonawala, Bank of America (Bullish on JPMorgan Chase):

    "Earlier this year, the company guided for $91 billion in net interest income, but another upgrade isn’t out of the question... The firm holds a $226 price target on the stock, suggesting nearly 9% upside from Wednesday’s close."

  • Mike Mayo, Wells Fargo (Cautiously Optimistic on JPMorgan Chase):

    "This could yield excess capital to be used for buybacks, balance sheet growth, securities portfolio clean-up or other action... estimating a buyback of around $5 billion over the next couple quarters."

  • John Heagerty, Redburn Atlantic (Bullish on JPMorgan Chase):

    "JPMorgan is simply regarded as the highest quality bank in the United States. He views the uncertain macroeconomic backdrop as a potential opportunity for the company to harness its strong balance sheet to acquire smaller banks."

Management Quotes

  • Jamie Dimon:

    "[Sticky inflation], wars and [the Federal Reserve’s policy] pose potential major threats ahead."