JPMorgan Chase Earnings Preview: What To Expect From JPM

JPMorgan reports fourth-quarter 2025 results on January 13 before market open. The quarter tests whether the bank can sustain capital-markets momentum while controlling the expense trajectory that pressured the stock in December. Consensus sits at $4.87 EPS and $45.57B revenue, both representing mid-single-digit year-over-year growth, but the setup is complicated by management’s December signal of approximately $105B in 2026 expenses, a figure that introduced a higher hurdle rate for operating leverage even as revenue conditions improved.

The estimate path into the print shows modest upward drift. Consensus EPS moved from $4.93 on January 6 to $4.87 currently, while revenue expectations tightened to $45.57B from a prior $45.98B. This compression reflects analysts recalibrating for the expense outlook rather than doubting revenue strength. Management’s December commentary pointed to low-single-digit investment banking revenue growth and low-teens Markets revenue growth for the quarter, framing that sets a baseline the Street appears to have accepted.

The outcome will determine whether the stock can extend its run to new highs or faces a valuation reset. JPMorgan trades at 16.6x trailing earnings, a premium to the diversified bank peer set, justified historically by superior return on equity and execution consistency. That premium holds only if the bank demonstrates it can translate stronger Markets and investment banking revenues into incremental earnings rather than reinvestment. A beat on consensus paired with expense discipline would support the current multiple. A beat accompanied by signals of further cost acceleration would likely trigger profit-taking despite headline strength.

Consensus Estimates

The estimate range is narrow relative to recent quarters, with the high-low EPS spread of $0.32 representing just 6.6% of the midpoint. That compression suggests analysts have converged on a similar view of the quarter’s mechanics, reducing the probability of a large consensus miss but also limiting the magnitude of potential upside surprise. The 30-day revision pattern shows seven upward moves and zero downgrades, consistent with improving visibility into capital-markets activity as the quarter progressed.

Revenue consensus of $45.57B sits 6.9% above the prior-year quarter, a deceleration from the 8-10% growth rates posted in the first three quarters of 2025. The slowdown reflects tougher year-over-year comparisons in net interest income rather than deteriorating fee momentum. Management’s full-year 2025 NII guidance of $95.5B, raised in July, implies fourth-quarter NII in the $23-24B range, roughly flat to prior year. The revenue growth story therefore hinges on noninterest revenue, specifically Markets and investment banking, where management signaled low-teens and low-single-digit growth respectively.

Management Guidance & Commentary

“We expect fourth-quarter investment banking revenue to grow at a low-single-digit rate year-over-year, with Markets revenue growing at a low-teens rate.”

Management’s December 9 update established the framework analysts used to model the quarter. The low-single-digit investment banking growth range implies $2.0-2.1B in IB fees, compared to $2.0B in the prior-year quarter. Low-teens Markets growth points to $6.2-6.5B, up from $5.5B a year earlier. Combined, those two lines would contribute approximately $1B in incremental revenue versus fourth-quarter 2024, enough to offset flat NII and support the 6-7% total revenue growth consensus embeds.

“We now expect 2026 expenses to be approximately $105 billion.”

The expense guidance proved more consequential for the stock than the revenue color. The $105B figure represents an increase from prior Street expectations of $102-103B for 2026, signaling management’s intent to reinvest revenue gains into technology, talent, and regulatory infrastructure. The market’s negative reaction, a 4.5% decline in the session following the announcement, reflected concern that incremental operating leverage would be limited even if revenue momentum continued.

Analyst Price Targets & Ratings

Wall Street maintains a constructive view with 80% of analysts rating shares a Buy or Strong Buy. The consensus target of $336.91 implies modest upside from current levels, though the tight range reflects uncertainty about whether the expense investment cycle will generate commensurate returns. Recent target adjustments have focused more on multiple compression than earnings revisions.

Sector & Peer Comparison

JPMorgan trades at a 26% premium to Bank of America on trailing P/E and a 41% premium to Wells Fargo, multiples justified by its 34.7% profit margin and 16.4% return on equity. The valuation gap to Goldman Sachs and Morgan Stanley, the pure-play capital-markets competitors, is narrower at 13% and 10% respectively, reflecting JPMorgan’s heavier exposure to net interest income, which carries lower cyclicality but also lower operating leverage than trading and investment banking.

Earnings Track Record

JPMorgan has beaten consensus EPS in 12 of the last 15 quarters, establishing a pattern of consistent upside delivery. The average surprise of 9.7% exceeds the typical 3-5% beat rate for large-cap banks, reflecting either conservative analyst modeling or the bank’s ability to generate revenue upside from capital-markets volatility that analysts struggle to forecast.

Post-Earnings Price Movement History

The muted average move on beats, essentially flat at -0.0%, reflects a market that prices JPMorgan for execution consistency rather than episodic surprises. The stock tends to react more to changes in the forward outlook than to backward-looking results. Third-quarter 2025 offers the clearest example of this dynamic: JPMorgan beat consensus by 4.5%, yet the stock declined 1.6% as investors focused on management’s cautious economic outlook and the lack of visibility into operating leverage.

Expected Move & Implied Volatility

The options market prices a 2.8% move in either direction through the earnings event, translating to a range of $321.63 to $340.17. That expected move sits above the historical median of approximately 2.0% but below the 3.5-4.0% moves priced during periods of elevated macro uncertainty. The 24.3% implied volatility represents a modest premium to the 30-day historical volatility of 18.7%, consistent with typical pre-earnings IV expansion rather than elevated event risk.

Expert Predictions & What to Watch

Key Outlook: Guidance Will Drive the Trade

The base case assumes JPMorgan delivers $5.00-5.10 EPS on $46.0-46.5B revenue, clearing consensus by a margin consistent with the bank’s 8-10% average surprise rate. Markets revenue in the low-teens growth range and investment banking in the low-single-digits would support that outcome. Net interest income of $23.5-24.0B, in line with the full-year guidance trajectory, completes the revenue picture.

Key Metrics to Watch

Markets revenue is the single most important line item because it carries the highest uncertainty and the highest incremental margin. Management’s low-teens guidance provides a range, but the difference between 10% growth and 15% growth is approximately $300M in revenue, translating to $0.15-0.20 in EPS given the business’s operating leverage. Fixed income trading, the largest component, will be scrutinized for evidence that volatility translated to client activity rather than just mark-to-market gains.

The December expense guidance remains the primary constraint on the stock’s ability to re-rate higher. Management needs to either quantify the return on the incremental $2-3B in 2026 spend or signal that a portion of the increase is one-time in nature. Absent that clarity, investors will assume the bank is trading near-term margin for long-term positioning, a strategy that compresses operating leverage and justifies a lower multiple.