JPM Q4 Earnings on Deck: Buy, Sell or Hold the Stock Ahead of Results?

JPMorgan JPM is slated to report fourth-quarter and full-year 2025 earnings on Jan. 13. As the largest U.S. bank, its earnings are closely watched for clues about the broader financial sector and are often seen as a bellwether for how other banks may perform that quarter.

JPM’s nine-month performance was impressive, driven by strong investment banking (IB) and trading, as well as remarkable growth in credit card and wholesale loans. The company’s upcoming quarterly results will likely be solid. The Zacks Consensus Estimate for revenues of $45.71 billion suggests a 6.9% year-over-year rise.

In the past seven days, the consensus estimate for fourth-quarter earnings has moved almost 1% north to $5.01. This indicates a 4.2% increase from the prior-year quarter’s level, as robust capital markets performance offers support.

Estimate Revision Trend
 

JPMorgan has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, with the average beat being 11.01%.

Earnings Surprise History
 

Factors to Influence JPMorgan’s Q4 Results

Net Interest Income (NII): In the fourth quarter, the Federal Reserve cut interest rates twice. This, along with a rate cut in September, lowered rates to the 3.50-3.75% range. This is likely to have hurt JPMorgan’s NII. However, a solid lending scenario and stabilizing funding/deposit costs are expected to have offered much-needed support. Per the Fed’s latest data, the demand for commercial and industrial, real estate and consumer loans was robust in the first two months of the quarter.

Management expects NII to reach almost $25 billion in the fourth quarter of 2025, which implies a full-year NII of approximately $95.8 billion. 

The Zacks Consensus Estimate for NII (reported) of $24.9 billion suggests a 6.8% rise on a year-over-year basis. Our estimate for NII implies growth of 6.8% to $24.93 billion.

Investment Banking (IB) Fees: Global mergers and acquisitions (M&As) in the fourth quarter of 2025 surged impressively from the lows witnessed in April and May following President Trump’s announcement of ‘Liberation Day’ tariff plans. The quarter saw a rise in M&A volume, driven by an easing of the buyer-seller valuation gap, lower capital costs and a focus on scale and AI integration. Also, JPMorgan’s leadership in the space is likely to have aided advisory fees. 

The fourth quarter also saw significant IPO activity. Several factors, including moderating inflation, lower rates and the ongoing AI boom, drove the rise. Further, global bond issuance volume was solid. Thus, growth in JPM’s underwriting fees (accounting for almost 60% of total IB fees) is expected to have been modest during the to-be-reported quarter.

At the Goldman Sachs 2025 U.S. Financial Services Conference, Marianne Lake, the CEO of the Consumer and Community Banking segment, said IB revenues in the fourth quarter are expected to increase in the low single digit.

The consensus estimate for IB revenues (in the CIB segment) of $2.71 billion implies a rise of 4.2% from the prior-year quarter. We expect the metric to be $2.72 billion. 

Markets Revenues: Client activity and market volatility were solid in the fourth quarter. Major factors that impacted trading business in the quarter included the longest U.S. government shutdown in history, a dip in consumer sentiment, easing monetary policy and a dominant AI-theme. Volatility was high in equity markets and other asset classes, including commodities, bonds and foreign exchange. Hence, JPMorgan is likely to have recorded robust growth in markets revenues (comprising nearly 20% of the company’s total revenues) this time around.

Management expects markets revenues in the fourth quarter to rise at a low-teens percentage rate on a year-over-year basis.

The Zacks Consensus Estimate for equity markets revenues is pegged at $2.82 billion, suggesting a jump of 38.2% from the prior-year quarter. The consensus estimate for fixed-income markets revenues of $5.61 billion indicates growth of 12.1%. We project equity markets revenues and fixed-income markets revenues of $3.3 billion and $5.62 billion, respectively.

Mortgage Banking Fees: Mortgage rates declined substantially in the fourth quarter from the levels observed at the beginning of 2025. This was mainly driven by the Fed’s monetary policy easing. Hence, refinancing activities and origination volume were decent. JPMorgan is expected to have posted a modest increase in mortgage banking fees in the to-be-reported quarter.

The consensus estimate for mortgage fees and related income of $369.5 million implies a 1.7% decrease from the prior-year quarter’s level. Our estimate for the metric is pegged at $342.3 million.

Expenses: JPMorgan’s plan of entering new markets by opening branches, which is already on track, along with efforts to expand the product suite, is likely to have resulted in an increase in operating expenses in the fourth quarter. Also, investments in technology to strengthen digital offerings might have led to higher costs.

Our estimate for non-interest expenses is pinned at $24.4 billion, up 7.2% year over year.

Asset Quality: JPMorgan is less likely to have set aside a huge amount of money for potential delinquent loans, as the interest rates have come down substantially from the highs of 5-5.25%. 

As it prepares to acquire Apple Inc.’s Apple Card portfolio from Goldman Sachs, JPMorgan expects to record a $2.2 billion provision for credit losses in fourth-quarter 2025 tied to its forward purchase commitment. 

Our estimate for provision for credit losses is pegged at $1.66 billion, down 36.7% year over year. The figure doesn’t include provisions related to Apple Card.

The Zacks Consensus Estimate for non-performing loans (NPLs) of $10.54 billion implies a 19.4% rise year over year. The consensus estimate for non-performing assets (NPAs) of $11.16 billion suggests a 20.2% jump. Our estimates for NPAs and NPLs are pegged at $9.63 billion and $9.31 billion, respectively.

What Our Model Unveils for JPMorgan

Per our proven model, the chances of an earnings beat for JPMorgan are low this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as you can see below.

JPMorgan has an Earnings ESP of -0.03%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

JPM carries a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

JPMorgan’s Price Performance & Valuation Analysis

JPMorgan shares delivered a soft performance in the fourth quarter, falling behind the S&P 500 Index. Also, the stock lagged behind its key peers, such as Citigroup C and Bank of America BAC.

4Q25 JPM Price Performance
 

Both Citigroup and Bank of America are scheduled to announce fourth-quarter and full-year 2025 numbers on Jan. 14. 

JPM’s shares appear expensive relative to the industry. The stock is currently trading at a forward 12-month price/earnings (P/E) of 15.67X, which is above the industry’s 15.34X.

Price-to-Earnings F12M
 

On the other hand, JPM stock is trading at a premium compared with Citigroup and Bank of America. At present, Citigroup has a forward P/E of 11.95X, while Bank of America’s forward P/E is 12.92X.

How to Approach JPMorgan Stock Before Q4 Earnings?

JPMorgan Chase stands to benefit from its scale, diversified operations and leading market presence across multiple business lines. The 2023 acquisition of First Republic Bank continues to support its financial performance, while the company’s ongoing regional expansion and cross-selling initiatives are expected to drive growth going forward. Although these initiatives will likely result in elevated expenses, they reinforce JPMorgan’s competitive edge and long-term potential.

However, the volatile nature of capital markets is expected to keep fee income growth subdued, and persistent asset quality pressures may remain a concern.

Investors should closely monitor management’s commentary on 2026 NII guidance and IB outlook during the upcoming fourth-quarter earnings call. Moreover, macroeconomic trends and policy developments that materially impact the company’s performance trajectory should be taken into consideration.

Existing shareholders may continue to hold JPM stock, given its strong fundamentals and proven resilience. Potential investors, on the other hand, should carefully weigh these factors and assess their risk tolerance before initiating new positions.

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This article originally published on Zacks Investment Research (zacks.com).

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