The Zacks Analyst Blog JPMorgan, Citigroup and Bank of America

Core Viewpoint - JPMorgan is set to report its Q4 2024 earnings on January 15, 2024, and is expected to provide insights into the performance of the banking sector due to its extensive involvement in various financial services [2][3]. Group 1: Earnings Expectations - The Zacks Consensus Estimate for JPMorgan's Q4 revenues is $40.92 billion, indicating a 6.1$3.95, reflecting a slight decline from the previous year due to increased provisions for credit losses and higher operating expenses [4]. - JPMorgan has a strong earnings surprise history, having outperformed the Zacks Consensus Estimate in the last four quarters with an average beat of 7.73% [4]. Group 2: Key Performance Drivers - Net Interest Income (NII) is expected to be around $22.9 billion, with a Zacks Consensus Estimate of$22.88 billion, suggesting a 4.9% decline year-over-year [5][7]. - Investment Banking (IB) revenues are projected to increase by 43.1% year-over-year, with a consensus estimate of $2.55 billion [10]. - Markets revenues are anticipated to rise by 15$2.12 billion, reflecting a 24.4% increase [12]. Group 3: Expense and Asset Quality Outlook - Adjusted non-interest expenses are expected to be approximately $23 billion, with management anticipating a rise due to expansion efforts and technology investments [14]. - The provision for credit losses is estimated at$2.66 billion, reflecting concerns over potential loan defaults [15]. - The consensus estimate for non-performing loans (NPLs) is $8.46 billion, indicating a 22.2$92.5 billion in 2024, up from $89.3 billion in 2023 [17]. - Adjusted non-interest expenses are projected to be around$91.5 billion, including increased FDIC assessments and technology spending [17]. - Loan growth is expected to be modest, with deposits anticipated to remain relatively flat [18]. Group 5: Stock Performance and Valuation - JPMorgan shares have outperformed the S&P 500 Index and its peers, but the stock is currently trading at a forward P/E of 14.48X, above the industry average of 14.08X, indicating a stretched valuation [22]. - The company is well-positioned to leverage its scale and expand its footprint, particularly following the acquisition of First Republic Bank [23].