Should You Bet Against JPMorgan Chase & Co. (JPM) This Earnings Season?

Should You Bet Against JPMorgan Chase & Co. (JPM) This Earnings Season? by Estimize

JPMorgan Chase & Co (JPM) Financials – Diversified Financial Services | Reports April 13, Before Market Opens

JPMorgan Chase 1Q16 Earnings – Key Takeaways:

  • The Estimize consensus is looking for EPS of $1.32 on revenue expectations of $24.20 billion, 6 cents higher than Wall Street on the bottom line and almost $350 million in sales
  • Chase, like other banks, has been adversely by the Fed’s negligence to raise rates again, weak conditions in China and volatility in energy prices
  • New regulations and ongoing litigation fees continue to hamper Chase’s bottom line
  • What are you expecting for JPM? Get your estimate in here!

With earnings season just about underway, we will soon know how some of the biggest names performed to start 2016. This week and early next week big banks and financial services prepare to kick things off with what expects to be underwhelming. Tomorrow morning, JPMorgan Chase is scheduled to report first quarter earnings, possibly setting the tone for the next 7 days. The bank is coming off a better than expected fourth quarter where it beat on both the top and bottom line by a wide margin. This marked the third quarter Chase topped expectations in fiscal 2015.

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Tomorrow, the Estimize consensus is looking for EPS of $1.32 on revenue expectations of $24.20 billion, 6 cents higher than Wall Street on the bottom line and almost $350 million in sales. Our Select consensus, on the other hand, is expecting a more modest beat of 3 cents and $90 million. Estimates have been feverishly cut lately, with per share estimates droping 15% and sales falling 5% in the past 3 months. This results in JPM’s 8% decline in earnings on a year over year basis.

Chase, like other banks, has been adversely impacted by the skepticism surrounding interest rates. The Fed negligence to raise the rates multiple times so far this year has put pressure on net interest income. That said, Chase is expected to see net interest income rise by about $2 billion for fiscal 2016. Moreover, total loan growth has been very strong and is expected to be a large revenue driver. This should help offset the losses in its trading and energy divisions.

Trading is tracking negative year over year growth on the lows in the energy market. JPM expects to build up reserves in excess of $750 million to cover its energy loans. Chase also faces ongoing threats of litigation which resulted in over $100 million in losses last quarter. On the bright side, the modest gains the market has made in the past month have put the bank in a better position.

JPMorgan Chase

Do you think JPM can beat estimates? There is still time to get your estimate in here!