JPMorgan, Wells Fargo and Morgan Stanley are set to post lower than expected Q1 results on Friday amidst price turmoil
Along with President Trump’s tariffs, the boom year expected for investment banks is pending as economic unrest has overturned our stocks. The bank, which saw its stock plunge last week, is expected to start first-quarter earnings on Friday.
KBW Equity Research Analyst David Konrad said there was hope last fall that early 2025 would lift the surge in animal spirits as well as regulations on both the IPO market and M&A activities in early 2025, according to a memo on April 3. Konrad has completely reduced its first quarter estimates for most globally systematically important banks or G-SIBS, as investment banks expect a 5% drop quarter. Volatility from Trump’s tariffs has put on hold on IPOs and many mergers; luck I have it It has been reported.
“While we expect a solid quarter compared to the first quarter of 2024, the uncertainty surrounding interest rate volatility, sticky inflation and tariffs has calmed down the stock market and the quarterly lending and investment banking activities,” writes Konrad.
Mike Mayo, Head of Research on Large Banks Wells FargoAlso, a first quarter estimate of bank stocks fell 4%, according to a March 27 research note. “The main reasons are the degree of paralysis from the uncertainty of the policy that makes us more conservative about our investments due to investments (late annual start), loans (no acceleration yet), fixed assets relocation (low FWD rates), and reserves (affected by estimated low GDP growth),” Mayo writes.
The best in class
Jmorgan, Wells Fargo and Morgan Stanleywill report the results for the first quarter on Friday. Goldman Sachs, City, Bank of America It is scheduled for next week.
Mayo said his top pick will remain City, given the bank’s expected progress from value destruction to value creation. City, along with Bank of America, will report its first quarter results on April 15th.
Mayo expects New York Bank to report $1.90 per share compared to a consensus estimate of $1.84. Mayo said it estimates “a 9% increase in transactions from the previous year, primarily due to the high volatility and estimated end-user hedging needs remained high through March.” KBW’s Konrad reduced Citi’s first quarter EPS from $1.83 to $1.83 from a share, and increased Citi’s price target from $92 to $96 due to reduced bank charges and higher provisions.
Citi has seen its inventory slide around 13% since April 2, when President Trump introduced his “liberation day” tariffs. On Thursday, the stock price fell about 4% to close at $61.59.
Mayo is hoping jpmorgan chainthe country’s largest bank will offer first quarter beats. JPMorgan should benefit from volatility in the short term given its role as a market facilitator, but in the medium term, banks should be one of the most set up to benefit from deregulation, Mayo said in a note on March 27th. He increased the JPMorgan Q1 EPS estimate by 12 cents, up from a consensus estimate of $4.58, at $4.77 per share. KBW’s Konrad reduced the estimate by 1 cent to $4.65 with a price target that remains at $264.
“JPM is best-in-class banking transactions at just 60% of the market (price and return),” Mayo said.
JPMorgan’s shares have fallen by about 7% since April 2nd. On Thursday, the shares closed above 3% at 227.11.
Capital market rebound has been delayed
Mayo and Conrad both reduced Morgan Stanley’s first quarter EPS estimates. Mayo expects MS to report $2.21 per share, down 10 cents from previous expectations, while KBW’s Konrad is forecasting $2.20 per share. The consensus estimate for MS is $2.22. Both analysts lowered Morgan Stanley’s price target, with Mayo at $130 and Konrad at $135. “In our view, the continued capital market recovery is slower, with better activity in the second half of 2025 and potentially benefiting from the seasonally frontloaded net worth in the first quarter of 2025,” Mayo wrote. Since April 2nd, Morgan Stanley’s shares have fallen by about 8%. The shares closed nearly 5% on Thursday to $106.58.
Wells Fargo is also on tap to report on Friday. KBW’s Konrad has raised his expectations for WFC to $1.22 per share. Konrad also reduced its price target from $86 to $83. “Top risks that could affect revenue outlook and price targets include unexpected increases in credit costs, reduced loan demand, and margin pressure,” Conrado said in a note on April 3.
Since Trump introduced tariffs, WFC shares have fallen by more than 11%. The shares rebounded late Wednesday, but returned those profits on Thursday, with the stock falling nearly 5% to 63.11.
Renowned investment bank Goldman Sachs is scheduled to report its first quarter results on Monday, April 14th. Mayo cut Goldman’s Q1 EPS estimate to $12.90. (Konrad reduced the GS price target from $660 to $600.) Despite lowering the estimate, Mayo said he believes the capital market rebound has not died late. “However, policy uncertainty tests our beliefs and makes us think that delays could be longer than we expected, as the ‘supercycle’ could be farther away,” Mayo said.
Goldman’s shares have fallen by about 11% since Trump introduced tariffs. On Thursday, the shares closed more than 5% to $489.80.
Finally, Bank of America is scheduled to report on Tuesday, April 15th. Mayo cut its first quarter EPS estimate from 2 cents to 78 cents. He reduced his price target from $59 to $55, but Mayo did not change at $56. BAC stocks have fallen 16% since April 2, closing at $34.85 on Thursday, falling nearly 4%.
“Consumers need to benefit from improving low-cost deposit pricing (which is likely), along with seasonal card fee headwinds,” Mayo wrote in a memo.
This story was originally introduced Fortune.com