JPMorgan Chase reports earnings on Wednesday.
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JPMorgan Chase will be the first of the big banks to report first-quarter results Wednesday, offering insights into the health of the bank as well as the path of the economic recovery.
Hopes for JPMorgan (ticker: JPM) and other banks are strong going into earnings. The SPDR S&P Bank ETF (KBE) is up 25% this year while JPMorgan shares have lagged behind slightly, gaining 22%. Both have outpaced the S&P 500, however, which is up 10%.
Analysts surveyed by FactSet expect the bank to post earnings of $3.09 per share on revenue of $30.5 billion. During last year’s first quarter, the bank posted earnings of 78 cents a share on $29 billion of revenue as the bank set billions aside in anticipation of pandemic-related credit losses.
The steepest revenue gains are expected in JPMorgan’s corporate and investment bank, with analysts projecting $12.6 billion in revenue, up from $10 billion in the year-ago quarter. The segment has been helped by a surge in deal-making activity and public offerings over the past year, even when there have been other weaknesses in the banking industry. While expectations are high for the first quarter, Wall Street will be paying close attention to the industry outlook to see if the pace of initial public offerings—especially from special purpose acquisition companies, or SPACs—can keep up.
“On the earnings call, we expect to hear commentary about investment banking pipelines, and given the strength in M&A announcement volumes, we expect commentary around advisory to be bullish,” Brian Kleinhanzl, managing director at Keefe, Bruyette & Woods, wrote Tuesday. “Conversely, we’ll also be keenly focused on management’s thoughts as to how activity in equity capital markets may normalize somewhat throughout the balance of 2021.”
Kleinhanzl expects that JPMorgan will post earnings of $3.21 per share, ahead of consensus estimates, helped by an expected 92% surge in profits in the bank’s corporate and investment bank unit.
Goldman Sachs (GS) and Wells Fargo (WFC) also report results Wednesday. Bank of America (BAC) and Citigroup (C) report Thursday, and Morgan Stanley (MS) posts first-quarter results on Friday.
Shares of JPMorgan were down 0.6% in recent trading Tuesday, lagging behind the S&P 500, which gained 0.1%.
Write to Carleton English at [email protected]
