Now the world’s premier banking institution, with the banking world’s premier CEO, JPMorgan (NYSE:JPM) will report their Q1 ’25 financial results before the opening bell on Friday, April 11th, 2025.
Consensus estimates for the bank giant are expecting $4.61 in earnings per share (EPS) on $44.1 billion in revenue for expected y-oy growth in EPS of exactly 0% (flat y-o-y) on -1% revenue growth.
The problem with JPM is history: 2023 and 2024 EPS growth was +23% and +15%, respectively, while revenue growth in ’23 and ’24 grew 23% and +1,2, respectively. The bank – as good as it is – was punching above its weight class the last two years, supported by good capital markets and a robust US economy.
It’s likely that 2025 will be a middling year for the bank giant. A lot of sell-side firms thought the IPO and M&A business, which was thought to have a lot of pent-up deals waiting to get done, seemed to fizzle in Q1 ’25. High expectations wound up meeting middling reality.
JPM’s CIB, which is the Corporate and Investment Bank segment, which represented 40% in net revenue and 47% of segment operating profits in Q4 ’24, might see their results return to the 8-quarter average of 33% and 34%, respectively, in 2025.
Valuation:
With the drop in JPM’s stock price from $280 late in ’24 to $235 today (after the big rally), the PE has compressed a little bit on JPM, as the EPS estimates haven’t changed much with the market turmoil.
At $235 per share, JPM is trading at 13x and 12x 2025 and 2026 EPS of $18.22 and $19.46, for expected y-o-y growth of 0% and 7%, respectively.
JPM was always the priciest bank on a book and tangible book basis, so if those metrics haven’t changed much, with the drop in the stock book value and tangible book value are now 2x and 2.4x, respectively.
With the drop in the stock to $235, JPM’s dividend yield has jumped over 2%.
In 2024, JPM’s ROTCE (return-on-tangible-capital-shareholders-equity) was 22% in Q1, 20% in Q2, 19% in Q3 ’24 and 21% in Q4 ’24. Those are stellar metrics for a bank the size of JPM.
I’m expecting JPM’s ROTCE to decline a little bit in 2025, as the various issues that have caused the market to selloff so far this year, wash through the remaining 3 quarters of the year. Morningstar has a targeted zone of 16% – 17% for JPM’s ROTCE, but the bank has done consistently better than that in years with a decent market tailwind.
Conclusion:
Given that the tariff turmoil didn’t really start until after Q2 ’25 started, the lion’s share of the capital markets disruption was not in Q1 ’25, hence JPM should probably have a decent or at the very least “inline” quarter with current estimates.
Q2 ’25 EPS and revenue estimates are looking for $4.56 in EPS on $43.9 bl in revenue for expected y-o-y growth of +4% on -11% decline in revenue. JPM printed $49.87 billion in revenue in Q2 ’24, (if that actual net revenue print wasn’t fat-fingered with the spreadsheet entry).
So Q2 ’25 guidance might be conservative as it is.
There are so many variables after the “tariff tiff” not the least of which is the bond market troubles, the drop in crude oil, etc. which surfaced this past 10 days, so there are a few reasons – the least of which being being tough compares – that JPM’s 2025 might be tougher than is expected.
You really have to admire Jamie Dimon, though: it appears that a conversation he had with President Trump today might have helped sway the 90-day pause on the non-China tariffs. Jamie has been pretty bearish since early 2022, when he proclaimed the “economic hurricane” was upon us. There were more bad recession calls by Wall Street in 2022 than I’ve ever seen in my time in the business, and that’s going on 30 years. Dimon is still the best CEO in the business, and one of the top 10 CEO’s in the US today.
With so many banks expecting a recession since 2022, the benefit to this has been the larger banks have been adding to loan-loss reserves probably earlier than needed (at least 2 years early) so if we do get a recession, the banks are better reserved today than if the onset of the recession was swift like in 2020.
Personally, I think JPM will look at guidance hard on Friday morning. Both for JPM, and for the rest of the SP 500, there is little reason for CEO’s to stretch for a home-run this year.
JPM was one of the client’s largest holdings as of 3/31/25, but I still think the bank has a “middling” year, as it navigates the political and economic waters.
Disclaimer: None of this is advice or a recommendation, but only an opinion. Past performance is no guarantee of future results. Investing can and does involve the loss of principal even for short periods of time. All EPS and revenue estimates are sourced from LSEG. None of this information may be updated, and if updated may not be done in a timely fashion.
Thanks for reading.