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JPM or MS: Which Stock Looks More Compelling Ahead of Q1 Earnings?
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Key Takeaways
JPMorgan is set to report Q1 2026 earnings as NII is expected to rise 10.1% year over year.
JPM expects mid- to high-teens IB fee growth and mid-teens markets revenue growth for Q1.
Morgan Stanley's client assets hit $9.3T and IRA AUM topped $1T, pushing toward a $10T goal.
The first-quarter earnings season for the banking sector begins this week, putting the spotlight on industry heavyweights like JPMorgan (JPM - Free Report) and Morgan Stanley (MS - Free Report) . As investors assess the investment opportunity, differences in business mix, earnings momentum and valuation may prove crucial in determining which bank is better positioned to outperform in the near term.
With that in mind, let’s take a closer look at how JPM and MS are expected to perform this quarter and which stock appears to be the smarter pick right now.
The Case for JPMorgan
As the largest U.S. bank, JPMorgan’s earnings (slated to be announced tomorrow) are closely watched for signals on the broader financial sector and serve as a bellwether for other banks’ performance for the quarter. Like 2025, this time, its earnings are expected to be driven by strong investment banking (IB) and trading, as well as a robust lending scenario.
As the Federal Reserve kept interest rates unchanged during the to-be-reported quarter, stabilizing deposit/funding costs and solid demand for commercial and industrial and consumer loans are likely to have supported JPM’s net interest income (NII). The Zacks Consensus Estimate for NII (reported) of $25.6 billion suggests a 10.1% year-over-year rise. Also, the company expects the metric to be almost $104.5 billion for 2026, up 9% from $95.9 billion in 2025.
Further, global deal-making activities and the underwriting business were impressive during the quarter. However, the Middle Eastern conflict and the ensuing uncertainty about its impact on the economy could affect the capital markets business in the coming days. Nonetheless, JPMorgan’s leadership in the space is likely to support the corresponding fee growth. For the first quarter of 2026, management expects IB fees to rise in the mid-teen percentage, potentially trending toward the high teens.
Similarly, markets revenues are likely to have improved in the first quarter as client activity and market volatility were strong. JPMorgan expects markets revenues in the first quarter to increase at a mid-teens percentage rate on a year-over-year basis. The consensus estimate for both equity and fixed income markets revenues indicates a double-digit growth rate.
Coming to expenses, as JPM expands through opening new branches and launching the product suite, along with technology upgrades to strengthen digital offerings, operating expenses are likely to remain elevated. Management expects adjusted non-interest expense to be $105 billion for this year, up from $96 billion in 2025.
The Case for Morgan Stanley
Morgan Stanley, set to report first-quarter earnings on April 15, has been diversifying its operations and lowering its reliance on the capital markets for income generation to create a more balanced revenue stream across market cycles. The company’s increased focus on investment and wealth management, along with its strategic alliances and acquisitions, offers support.
As of Dec. 31, 2025, total client assets reached $9.3 trillion, bringing the company closer to its longstanding $10 trillion asset management target set by former CEO James Gorman. The individual retirement account (IRA) AUM in the wealth management arm has crossed the $1 trillion mark, highlighting strong momentum across advisor-led, workplace and self-directed channels, underscoring Morgan Stanley’s growing scale in the retirement savings market.
In the first quarter, Morgan Stanley is likely to have delivered a strong IB performance based on the favorable operating backdrop. The Zacks Consensus Estimate for IB income of $2.02 billion indicates a year-over-year jump of 29.5%. Likewise, Morgan Stanley’s trading business is expected to have been solid in the first quarter of 2026, supported by increased client activity and market volatility. Similar to JPM, the consensus estimate for both equity and fixed income trading income indicates double-digit growth.
Additionally, Morgan Stanley’s partnership with Mitsubishi UFJ Financial Group, Inc. will keep supporting profitability and solidify its position in Japan’s market. The company’s Asia region revenues surged 23% year over year to $9.42 billion in 2025. A similar trend is expected to continue this year, too.
Despite Morgan Stanley’s restructuring and streamlining efforts, overall expenses have been increasing. Expenses are expected to remain elevated due to the steady increase in revenues (leading to higher compensation costs) and inflation, as well as the company’s investments in franchise, technology and inorganic expansion efforts.
JPM & MS: Price Performance & Valuation Analysis
In the first quarter of 2026, shares of JPMorgan and Morgan Stanley lost 8.7% and 7.3%, respectively.
JPM & MS 1Q26 Price Performance
Image Source: Zacks Investment Research
JPM lagged the Zacks Investment Bank industry and the S&P 500 Index. On the other hand, MS has underperformed the broader index while faring better than the industry.
In terms of valuation, JPMorgan is currently trading at a 12-month forward price-to-earnings (P/E) of 13.94X. MS stock, on the other hand, is currently trading at a 12-month forward P/E of 15.19X.
P/E F12M
Image Source: Zacks Investment Research
Further, JPM and Morgan Stanley are trading at a premium compared with the industry average of 13.29X. So, JPMorgan is inexpensive compared to Morgan Stanley.
How Do 1Q26 Estimates Compare for JPM & MS?
The Zacks Consensus Estimate for JPM’s revenues implies a 7.2% year-over-year rise, with earnings expected to grow 7.7%. Quarterly earnings estimates have moved lower over the past week.
Estimate Revision
Image Source: Zacks Investment Research
On the contrary, analysts are more bullish on Morgan Stanley’s prospects. The consensus mark for quarterly revenues suggests a year-over-year jump of 11.9%. Also, the consensus estimate for earnings suggests a 17.7% increase. Earnings estimates have been revised lower over the past seven days.
Estimate Revision
Image Source: Zacks Investment Research
Ahead of Q1 2026 Earnings: JPMorgan or Morgan Stanley?
JPMorgan looks like the better pre-earnings bet because it combines stronger balance sheet-driven earnings visibility with solid capital markets momentum at a cheaper valuation. Its quarterly setup is supported by expected 10.1% year-over-year NII growth, mid- to high-teens IB fee growth and mid-teens markets revenue growth, highlighting a more diversified and resilient earnings profile.
Morgan Stanley should deliver healthy results, but its high dependence on fee-based businesses and premium valuation make the risk-reward less attractive than JPM. Even though MS has stronger near-term growth estimates, JPMorgan offers a better mix of scale, earnings durability and relative value heading into first-quarter 2026 results.
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JPM or MS: Which Stock Looks More Compelling Ahead of Q1 Earnings?
Key Takeaways
The first-quarter earnings season for the banking sector begins this week, putting the spotlight on industry heavyweights like JPMorgan (JPM - Free Report) and Morgan Stanley (MS - Free Report) . As investors assess the investment opportunity, differences in business mix, earnings momentum and valuation may prove crucial in determining which bank is better positioned to outperform in the near term.
With that in mind, let’s take a closer look at how JPM and MS are expected to perform this quarter and which stock appears to be the smarter pick right now.
The Case for JPMorgan
As the largest U.S. bank, JPMorgan’s earnings (slated to be announced tomorrow) are closely watched for signals on the broader financial sector and serve as a bellwether for other banks’ performance for the quarter. Like 2025, this time, its earnings are expected to be driven by strong investment banking (IB) and trading, as well as a robust lending scenario.
As the Federal Reserve kept interest rates unchanged during the to-be-reported quarter, stabilizing deposit/funding costs and solid demand for commercial and industrial and consumer loans are likely to have supported JPM’s net interest income (NII). The Zacks Consensus Estimate for NII (reported) of $25.6 billion suggests a 10.1% year-over-year rise. Also, the company expects the metric to be almost $104.5 billion for 2026, up 9% from $95.9 billion in 2025.
Further, global deal-making activities and the underwriting business were impressive during the quarter. However, the Middle Eastern conflict and the ensuing uncertainty about its impact on the economy could affect the capital markets business in the coming days. Nonetheless, JPMorgan’s leadership in the space is likely to support the corresponding fee growth. For the first quarter of 2026, management expects IB fees to rise in the mid-teen percentage, potentially trending toward the high teens.
Similarly, markets revenues are likely to have improved in the first quarter as client activity and market volatility were strong. JPMorgan expects markets revenues in the first quarter to increase at a mid-teens percentage rate on a year-over-year basis. The consensus estimate for both equity and fixed income markets revenues indicates a double-digit growth rate.
Coming to expenses, as JPM expands through opening new branches and launching the product suite, along with technology upgrades to strengthen digital offerings, operating expenses are likely to remain elevated. Management expects adjusted non-interest expense to be $105 billion for this year, up from $96 billion in 2025.
The Case for Morgan Stanley
Morgan Stanley, set to report first-quarter earnings on April 15, has been diversifying its operations and lowering its reliance on the capital markets for income generation to create a more balanced revenue stream across market cycles. The company’s increased focus on investment and wealth management, along with its strategic alliances and acquisitions, offers support.
As of Dec. 31, 2025, total client assets reached $9.3 trillion, bringing the company closer to its longstanding $10 trillion asset management target set by former CEO James Gorman. The individual retirement account (IRA) AUM in the wealth management arm has crossed the $1 trillion mark, highlighting strong momentum across advisor-led, workplace and self-directed channels, underscoring Morgan Stanley’s growing scale in the retirement savings market.
In the first quarter, Morgan Stanley is likely to have delivered a strong IB performance based on the favorable operating backdrop. The Zacks Consensus Estimate for IB income of $2.02 billion indicates a year-over-year jump of 29.5%. Likewise, Morgan Stanley’s trading business is expected to have been solid in the first quarter of 2026, supported by increased client activity and market volatility. Similar to JPM, the consensus estimate for both equity and fixed income trading income indicates double-digit growth.
Additionally, Morgan Stanley’s partnership with Mitsubishi UFJ Financial Group, Inc. will keep supporting profitability and solidify its position in Japan’s market. The company’s Asia region revenues surged 23% year over year to $9.42 billion in 2025. A similar trend is expected to continue this year, too.
Despite Morgan Stanley’s restructuring and streamlining efforts, overall expenses have been increasing. Expenses are expected to remain elevated due to the steady increase in revenues (leading to higher compensation costs) and inflation, as well as the company’s investments in franchise, technology and inorganic expansion efforts.
JPM & MS: Price Performance & Valuation Analysis
In the first quarter of 2026, shares of JPMorgan and Morgan Stanley lost 8.7% and 7.3%, respectively.
JPM & MS 1Q26 Price Performance
Image Source: Zacks Investment Research
JPM lagged the Zacks Investment Bank industry and the S&P 500 Index. On the other hand, MS has underperformed the broader index while faring better than the industry.
In terms of valuation, JPMorgan is currently trading at a 12-month forward price-to-earnings (P/E) of 13.94X. MS stock, on the other hand, is currently trading at a 12-month forward P/E of 15.19X.
P/E F12M
Image Source: Zacks Investment Research
Further, JPM and Morgan Stanley are trading at a premium compared with the industry average of 13.29X. So, JPMorgan is inexpensive compared to Morgan Stanley.
How Do 1Q26 Estimates Compare for JPM & MS?
The Zacks Consensus Estimate for JPM’s revenues implies a 7.2% year-over-year rise, with earnings expected to grow 7.7%. Quarterly earnings estimates have moved lower over the past week.
Estimate Revision
Image Source: Zacks Investment Research
On the contrary, analysts are more bullish on Morgan Stanley’s prospects. The consensus mark for quarterly revenues suggests a year-over-year jump of 11.9%. Also, the consensus estimate for earnings suggests a 17.7% increase. Earnings estimates have been revised lower over the past seven days.
Estimate Revision
Image Source: Zacks Investment Research
Ahead of Q1 2026 Earnings: JPMorgan or Morgan Stanley?
JPMorgan looks like the better pre-earnings bet because it combines stronger balance sheet-driven earnings visibility with solid capital markets momentum at a cheaper valuation. Its quarterly setup is supported by expected 10.1% year-over-year NII growth, mid- to high-teens IB fee growth and mid-teens markets revenue growth, highlighting a more diversified and resilient earnings profile.
Morgan Stanley should deliver healthy results, but its high dependence on fee-based businesses and premium valuation make the risk-reward less attractive than JPM. Even though MS has stronger near-term growth estimates, JPMorgan offers a better mix of scale, earnings durability and relative value heading into first-quarter 2026 results.
At present, JPMorgan and Morgan Stanley carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.