JPMorgan Chase (JPM) is expected to report first quarter earnings before the open on Wednesday, April 13, with a conference call scheduled for 8:30 am ET. JPMorgan is a global financial services firm operating in more than 60 countries.
EXPECTATIONS: Analysts are looking for earnings per share of $1.26 on revenue of $23.4B. EPS consensus ranges $1.13-$1.38 on a revenue range of $19.75B-$24.15B, according to First Call. Speaking at an industry conference on February 9, Morgan Stanley's (MS) trading head warned that Q1 started out adequately but later became "a lot" choppier for Wall Street trading revenue. Later, at JPMorgan's investor day on February 23, investment bank chief Daniel Pinto said JPMorgan expects revenue from investment bank fees to fall 25% in Q1, and that revenue from sales and trading in its markets business had already fallen 20% at that time.
LAST QUARTER: On January 14, JPMorgan reported fourth quarter EPS of $1.32 against expectations for $1.25, and revenue of $23.7B versus estimates of $22.89B. Tangible book value per share rose 8% to $48.13 and net interest income rose 1%, while revenue for the company's Corporate and Investment Bank division fell 4%.
NEWS: Media reports in early February indicated that JPMorgan started testing blockchain technology in collaboration with Blythe Masters' Digital Asset Holdings to reduce the cost and complexity of trading, and respond to emerging disruptions from the tech sector. On February 9, one of CNBC's sources revealed that the Federal Reserve is requiring banks to prepare for a hypothetical negative rate scenario, though the possibility of instituting negative rates was repeatedly downplayed by Fed officials in the months following the report. On February 11, JPMorgan CEO Jamie Dimon disclosed the purchase of 500,000 shares of his bank's stock, marking the oft-cited "Dimon bottom" for the market's gyrations at the time.
Speaking in anonymous Reuters interviews on February 19, six "senior bankers" told the publication they are struggling with a weak global economy as well as the costs and limitations of regulations. In mid-March, the Federal Reserve left rates unchanged and appeared cautious on further rate hikes during the year, sending stocks of major U.S. banks lower. Writing in the company's annual report on April 6, Jamie Dimon said "liquidity has gotten worse and we have seen extreme volatility and distortions in several markets... In our opinion, lower liquidity and higher volatility are here to stay."
STREET RESEARCH: Weighing in on JPMorgan's Q4 results, Baird called the numbers "solid" and said the bank's outlook for improving NII and macro growth should ease investor concerns. On February 5, UBS upgraded the stock -- which was trading near $58 at the time -- to Buy and raised its price target to $68 from $63, citing valuation and attractive risk/reward levels. On February 17, RBC Capital argued that this year's decline in banking stocks has been overdone. Investors overlooked several positive trends, including a healthy U.S. economy, strong credit quality, and high loan growth, said RBC, which recommended picking up JPMorgan, Wells Fargo (WFC), U.S. Bancorp (USB) and certain smaller names in the space.
PRICE ACTION: Shares of JPMorgan are up 1.87% to $59.29 ahead of its report Wednesday morning.
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