Bank stocks have seen positivity on the back of constructive investor sentiment, with the group expected to benefit from a confluence of favorable developments. These tailwinds range from accelerating loan-growth trends to capital markets momentum in an overall permissive regulatory backdrop.

These stocks have not only outperformed the broader market over the past year, as we show nearby, but have actually done twice as well as the Magnificent 7 stocks over this time period. It will be interesting to see whether these stocks can sustain their performance momentum as they release their December-quarter results this week and share their outlook for 2026.

JPMorgan (JPM Quick QuoteJPM - Free Report) kicks off the reporting cycle for the group on Tuesday (January 13th), with Citigroup (C Quick QuoteC - Free Report) , Wells Fargo (WFC Quick QuoteWFC - Free Report) , and Bank of America (BAC Quick QuoteBAC - Free Report) reporting results the day after (January 14^th).

The chart below shows the one-year performance of JPMorgan, Citigroup, Bank of America, and Wells Fargo relative to the S&P 500 index.

Image Source: Zacks Investment Research

With monetary policy firmly in easing mode after three rate cuts in 2025 and at least two more expected in 2026, loan growth is expected to finally start accelerating again. This Fed outlook is also expected to have beneficial effects on deposit trends, which are expected to move towards the historical trend range.

After anemic loan growth over the last two years, we are due for a notable acceleration in this performance metric in 2025 Q4 and beyond, with loans in the aggregate expected to increase by more than 5% in Q4. Driving this expected acceleration is diminished macroeconomic uncertainty and enhanced risk appetites, in addition to the aforementioned Fed easing. This is positive for net interest income (NII) for these banks, everything else constant. There is likely further upside to current 2026 NII estimates, particularly if deposit and loan growth accelerate. The outlook for credit quality is benign, as card delinquencies have started to decline, bankruptcies have stabilized, and household and business balance sheets remain healthy.   

With respect to investment banking, Q4 revenues will likely be up in the mid-single digits relative to the same period last year, with double-digit revenue gains in equity capital markets (ECM) and M&A fees offsetting flat to modestly declining trends in other areas. Trading revenues are expected to increase at a rate comparable to that of investment banking, with strong gains in equities offsetting flat-to-moderately down revenues from fixed income, currencies, and commodities (FICC). Trading revenues have been up nicely in the first three quarters of 2025, but comparisons will increasingly become more challenging over the coming quarters.  

Expectations for JPMorgan, Wells Fargo, & Citigroup

JPMorgan is expected to report $5.01 per share in earnings (up +4.2% year-over-year) on $45.7 billion in revenues (up +6.8% YoY). The stock was modestly down following the October 14th earnings release in which it missed revenue estimates. Estimates have been steadily rising, with the current $5.01 per share estimate up from $4.93 a month ago and $4.73 three months ago.

Wells Fargo is expected to report EPS of $1.66 (up +16.9% YoY on $21.6 billion in revenues (up +6% YoY). Estimates for Q4 have inched up since the period began, with the current $1.66 estimate unchanged from a month ago but up from $1.57 three months ago. Wells Fargo shares were up big following the last quarterly release on October 14^th.

For Citigroup, the expectation is of $1.65 per share in earnings (up +23.1% YoY) on $20.9 billion in revenues (up +7%). The revisions trend has been negative, with analysts nudging their estimates lower to account for business dispositions and other restructuring actions. Citi shares were up following the last quarterly release on October 14^th, on top and bottom-line beats and steady progress on the business repositioning front. The market’s reaction to any Citi quarterly release is more a function of its assessment of management’s progress in repositioning the business and simplifying its structure than of the actual quarterly results. We don’t think this report will be any different in that respect.

The Zacks Investment Brokers & Managers, of which JPMorgan, Citigroup, and Wells Fargo are a part, is expected to earn +2.8% higher earnings in 2025 Q4 on +7.6% higher revenues. Please note that this industry accounted for approximately 68% of the Zacks Finance sector’s total earnings over the trailing four-quarter period.

Image Source: Zacks Investment Research

As you can see above, Q4 earnings for the Zacks Finance sector are expected to be up +12.1% from the same period last year on +9.4% higher revenues.

The chart below shows the Finance sector’s quarterly growth, with expectations for 2025 Q4 contrasted with actual results for the last two periods and estimates for the next four quarters.

Image Source: Zacks Investment Research

Despite the big bank stocks’ outperformance over the past year, they are still cheap on most conventional valuation metrics. The chart below shows a 10-year history of the Zacks industry on a forward 12-month P/E basis as a proportion of the market multiple.

Image Source: Zacks Investment Research

At first glance, this valuation picture may look full, if not rich. But we have to see the group’s valuation multiple relative to the broader market.

Looked at relative to the S&P 500 index, the Zacks Major Banks industry is currently trading at 64% of the S&P 500 forward 12-month P/E multiple. Over the last 10 years, the industry has traded as high as 78% of the index, as low as 52%, and a median of 62%, as the chart above shows.

Q4 Earnings Season Scorecard

The Q4 earnings season will take center stage with the bank results this week. However, the reporting cycle has already begun, with results from 19 S&P 500 index members already in. All of these 19 index members, which include such bellwether operators as FedEx, Nike, Oracle, and others, have reported results for their fiscal quarters ending in November. We and other data aggregators count these fiscal November-quarter results as part of the December-quarter tally.

Total earnings for the 19 index members that have reported results are up +30.8% from the same period last year on +8.8% higher revenues, with 84.2% beating EPS estimates and 73.7% beating revenue estimates.

The comparison charts below put the growth rates for these 19 index members with what we had seen from this same group of companies in other recent periods.

Image Source: Zacks Investment Research

The comparison charts below show the Q4 EPS and revenue beats percentages for this group of companies relative to what we had seen from them in other recent periods.

Image Source: Zacks Investment Research

It is too early to draw any firm conclusions from the results thus far, given the small sample of results. But the earnings and revenue growth rates show a notable acceleration from other recent periods, while the revenue beats percentages are tracking below the preceding two quarters.  

The Earnings Big Picture

The chart below shows the Q4 earnings and revenue growth expectations in the context of where growth has been in the preceding four quarters and what is expected in the coming three quarters.

Image Source: Zacks Investment Research

The chart below shows the overall earnings picture on a calendar-year basis, with double-digit earnings growth expected in 2025 and 2026.

Image Source: Zacks Investment Research

For a detailed look at the overall earnings picture, including expectations for the coming periods, please check out our weekly Earnings Trends report >>>>Broad-Based Earnings Growth Expected in 2026