We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Weaker Trading Performance to Hurt JPMorgan's (JPM) Q2 Earnings
Read MoreHide Full Article
JPMorgan’s (JPM - Free Report) trading business (constituting almost 20% of its total revenues) is expected to have been a weak spot in the second quarter of 2023. Unlike the prior few quarters, when huge market volatility and client activity drove markets revenues, capital markets were subdued this time around.
JPM is scheduled to announce the quarterly numbers on Jul 14, before market open.
Market volatility and client activity were muted in the second quarter due to the Congressional debate over the debt ceiling. Also, the risks of an economic downturn/recession, the Federal Reserve’s hawkish monetary policy stance to stem out “sticky” inflation and geopolitical concerns led to ambiguity among investors.
These factors, thus, resulted in lower volatility in equity markets and other asset classes, including commodities, bonds and foreign exchange. Hence, JPMorgan is likely to have recorded weak markets revenues in the to-be-reported quarter.
Further, tougher comps from the prior year are expected to have weighed on JPM’s year-over-year performance. The consensus estimate for equity markets revenues of $3.05 billion suggests a 1% fall. The Zacks Consensus Estimate for fixed-income markets revenues of $4.91 billion indicates a 4.2% increase.
Our estimates for equity markets revenues and fixed-income markets revenues stand at $2.92 billion and $4.95 billion, respectively.
Q2 Earnings & Revenue Growth Expectations
The Zacks Consensus Estimate for second-quarter earnings is pegged at $3.66, which has witnessed an upward revision of almost 1% over the past seven days. The estimated figure suggests a jump of 32.6% from the year-ago reported number. Our estimate for earnings is $3.50.
The consensus estimate for sales of $37.03 billion indicates a 20.6% year-over-year rise. Our estimate for sales is $36.63 billion, suggesting an increase of 19.3%.
Click here to learn about the other factors that are likely to have impacted JPM’s overall performance.
Our Take
Apart from a soft markets business, weaker investment banking and mortgage banking performances are expected to have hurt this Zacks Rank #2 (Buy) company’s second-quarter numbers. Further, higher provisions and rising expenses might have acted as spoilsports.
On the other hand, the buyout of First Republic Bank, modest loan demand and high interest rates are likely to have offered much-needed support to JPM’s quarterly performance.
Similar to JPM, trading revenues constitute a major part of total revenues for other banks like Goldman Sachs (GS - Free Report) and Morgan Stanley (MS - Free Report) . Earnings of GS and MS are less likely to have received support from weak trading performance in the June-ended quarter.
While Goldman is scheduled to report second-quarter 2023 results numbers on Jul 19, Morgan Stanley will come out with the quarterly figures on Jul 18.
Image: Bigstock
Weaker Trading Performance to Hurt JPMorgan's (JPM) Q2 Earnings
JPMorgan’s (JPM - Free Report) trading business (constituting almost 20% of its total revenues) is expected to have been a weak spot in the second quarter of 2023. Unlike the prior few quarters, when huge market volatility and client activity drove markets revenues, capital markets were subdued this time around.
JPM is scheduled to announce the quarterly numbers on Jul 14, before market open.
Market volatility and client activity were muted in the second quarter due to the Congressional debate over the debt ceiling. Also, the risks of an economic downturn/recession, the Federal Reserve’s hawkish monetary policy stance to stem out “sticky” inflation and geopolitical concerns led to ambiguity among investors.
These factors, thus, resulted in lower volatility in equity markets and other asset classes, including commodities, bonds and foreign exchange. Hence, JPMorgan is likely to have recorded weak markets revenues in the to-be-reported quarter.
Further, tougher comps from the prior year are expected to have weighed on JPM’s year-over-year performance. The consensus estimate for equity markets revenues of $3.05 billion suggests a 1% fall. The Zacks Consensus Estimate for fixed-income markets revenues of $4.91 billion indicates a 4.2% increase.
Our estimates for equity markets revenues and fixed-income markets revenues stand at $2.92 billion and $4.95 billion, respectively.
Q2 Earnings & Revenue Growth Expectations
The Zacks Consensus Estimate for second-quarter earnings is pegged at $3.66, which has witnessed an upward revision of almost 1% over the past seven days. The estimated figure suggests a jump of 32.6% from the year-ago reported number. Our estimate for earnings is $3.50.
The consensus estimate for sales of $37.03 billion indicates a 20.6% year-over-year rise. Our estimate for sales is $36.63 billion, suggesting an increase of 19.3%.
JPMorgan Chase & Co. Price and EPS Surprise
JPMorgan Chase & Co. price-eps-surprise | JPMorgan Chase & Co. Quote
Click here to learn about the other factors that are likely to have impacted JPM’s overall performance.
Our Take
Apart from a soft markets business, weaker investment banking and mortgage banking performances are expected to have hurt this Zacks Rank #2 (Buy) company’s second-quarter numbers. Further, higher provisions and rising expenses might have acted as spoilsports.
On the other hand, the buyout of First Republic Bank, modest loan demand and high interest rates are likely to have offered much-needed support to JPM’s quarterly performance.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Competitive Landscape
Similar to JPM, trading revenues constitute a major part of total revenues for other banks like Goldman Sachs (GS - Free Report) and Morgan Stanley (MS - Free Report) . Earnings of GS and MS are less likely to have received support from weak trading performance in the June-ended quarter.
While Goldman is scheduled to report second-quarter 2023 results numbers on Jul 19, Morgan Stanley will come out with the quarterly figures on Jul 18.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.