(Bloomberg) — JPMorgan Chase & Co. bank analysts are taking a contrarian view when it comes to first-quarter performance for global investment banks, expecting most to have beaten expectations.
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“We believe markets revenues for global investment banks have improved post the escalation in Russia-Ukraine situation with higher volatility driving spreads as well as activity levels in derivatives,” the analysts led by Kian Abouhossein write in a note on Friday.
The analysts still expect revenue to decline compared with a strong start to 2021, but believe it won’t be as bad as the market anticipates and see full-year earnings per share estimates rising 2% on average.
They expect commodities to be the best-performing part of fixed income, currency and commodities trading, while equities trading is seen benefiting from strong derivative flow activity.
The analysts selected Goldman Sachs Group Inc. as their top pick and put the lender on “positive catalyst watch” as the U.S. bank is the largest commodities player in their coverage.
Read more: Europe’s Banks Torn Between Rate Benefits and Credit Risk: GS
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