J.P. Morgan Chase is the next big company (and bank) to report earnings with results due Tuesday before the bell.
The shares rose on Monday after Citigroup reported earnings that were better than feared. Citi did say, however, that bond trading dropped 21 percent to $1.94 billion, a figure that could worry investors of the more trading-focused firms such as J.P. Morgan and Morgan Stanley.
CEO Jamie Dimon pointed out that last month that trading revenue would be “roughly equivalent to last year, with almost a month to go.”
Goldman Sachs and Credit Suisse believe the bank’s earnings will fall short of consensus estimates.
Though Barclays believes the bank will top estimates, just as they have for the last 15 quarters.
Here’s what some of the other firms are expecting on Tuesday:
“We’re 1% (3c) above consensus, on lower expenses…While JPM has guided to $63.5B in expenses for full year 2018, we are modeling a lower $62.9B number given lower market related revenues this quarter likely means lower comp accruals…Focus on loan and deposit growth.”
“We lower our 4Q18, 2018, and 2019 EPS estimates to $2.20, $9.16, and $9.91 from $2.22, $9.18, and $10.00, respectively, due to recent volatility in the capital markets businesses”
“We expect JPM to report 4Q18 EPS of $2.25 vs. consensus of $2.23….. Note, JPM has exceeded consensus EPS expectations for 15 straight quarters……Though we expect market sensitive revenues to be challenged in 4Q18, results should benefit from higher net interest income (loan growth, NIM expansion), controlled expenses, benign asset quality and active share repurchase.”
“We are modestly below consensus, with slightly lower NII (-1%) driving revenue below street expectations (-1%), given inline fees….. We estimate 4% core expense growth, and we are 40bp lower on efficiency ratio even with weaker revenue….. Provisions are modestly higher, and we expect a 3bp YoY increase in loss rate.”
“We are decreasing our 2018 estimate by 20c due to lower expected Corporate & Investment Banking fees….. We are decreasing our 2019 estimates by 35c to $10.15, our 2020 by 40c to $10.75, and our 2021 estimate by 45c to $11.25 due to lower net interest revenue and principal transactions fees……We are decreasing our price target by $6 to $109 from a higher cost of equity assumption of 11.1% due to a higher equity risk premium assumption of 7% and beta assumption of 1.15 (vs1.10 previously).”
“Our 4Q18 EPS estimate is $2.14 (consensus is at $2.28)….. We expect aggregate reported revenue of ~$27bn, up 5% year/year and down 3% quarter/quarter with sequential comparisons reflecting the combination of sustained momentum in the ‘traditional’ banking operations and capital markets weakness: weaker trading-related revenues (+5% yr/yr, -16% qtr/qtr), weaker investment banking revenues (-4% yr/yr, -5% qtr/qtr), and no better than flattish comps from asset management.”
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