Zacks Earnings Trends Highlights: JPMorgan, Wells Fargo and Citigroup

For Immediate Release

Chicago, IL – July 10, 2025 – Zacks Director of Research Sheraz Mian says, "The quarter started with significant pressure on Tech sector estimates, but the negative revisions trend notably stabilized in the subsequent weeks."

Finance Earnings Outlook Improves: A Closer Look

Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>

Here are the key points:

• Total S&P 500 earnings for the June quarter are expected to be up +4.7% from the same period last year on +4.0% higher revenues. While negative revisions to Q2 estimates have stabilized in recent weeks, estimates for the period have been under significant pressure relative to other recent periods since the June quarter got underway.
• Q2 earnings estimates for the Tech and Finance sectors, the two largest contributors to aggregate S&P 500 earnings, accounting for 51% of all index earnings, have also been cut since the quarter got underway. The quarter started with significant pressure on Tech sector estimates, but the negative revisions trend notably stabilized in the subsequent weeks.
• Q2 earnings growth for the S&P 500 index of +4.7% improves to +6.7% once the Energy sector’s drag is removed from the aggregate numbers, but the growth pace drops to +1.6% once the Tech sector’s substantial contribution is excluded.
• Q2 earnings for the ‘Magnificent 7’ group of companies are expected to be up +11.4% from the same period last year on +11.1% higher revenues. Excluding the ‘Mag 7’ contribution, Q2 earnings for the rest of the index would be up +3.3% (vs. +4.7%).

Bank Earnings Outlook Improving

JPMorgan JPM, Wells Fargo WFC and Citigroup C will kick-start the June-quarter reporting cycle for the Finance sector on July 15^th. These banks comfortably passed the Fed’s stress tests, opening the way for increased capital returns to shareholders through share buybacks and dividend hikes.

The earnings outlook for the group remains subdued, with growth hindered by weak demand trends in both the conventional banking business and investment banking. But the operating environment for the group is steadily improving, both in terms of fading macroeconomic fears and increasing odds of relief on the regulatory front. While Q2 earnings growth for the group is expected to be flat at best, estimates for the second half and beyond are starting to reflect the improving operating environment.

For JPMorgan, Q2 earnings are expected to be down -5.4% on -13.3% lower revenues. For Citigroup and Wells Fargo, Q2 earnings are expected to be down -3.8% and -7% from the year-earlier level, respectively. While Q2 EPS estimates for each of these banking leaders have remained stable at best in recent weeks, a clear trend is emerging of steadily rising earnings estimates for the back half of the year and beyond.

You can see this in the revisions trend for 2026 in recent weeks, with current 2026 EPS estimates for JPMorgan, Wells Fargo, and Citigroup increasing by +2%, +1.5%, and +1.1% over the past month, respectively.

The Zacks Investment Brokers & Managers industry at the mezzanine level, which includes JPMorgan, Citigroup, and Wells Fargo, total Q2 earnings are expected to be down -2.8% from the same period last year, on -0.5% lower revenues. For the Zacks Finance sector, roughly 60% of whose earnings come from this industry, Q2 earnings are expected to be up +8.2% on +3.9% higher revenues.

Unlike the group’s anemic earnings growth expectations, these stocks have been standout performers in the market lately, which likely reflects improved odds of capital returns expectations and hopes of improving earnings growth in the coming periods.

The banking industry and the broader Finance sector are expected to be significant contributors to aggregate earnings growth going forward.

Expectations for 2025 Q2

The start of Q2 coincided with heightened tariff uncertainty following the punitive April 2^nd tariff announcements. While the onset of the announced levies was eventually delayed by three months, the issue weighed heavily on estimates for the current and upcoming quarters, particularly in the weeks following the April 2^nd announcement.

The expectation at present is for Q2 earnings for the S&P 500 index to increase by +4.7% from the same period last year on +4.0% higher revenues.

While it is not unusual for estimates to be adjusted lower, the magnitude and breadth of Q2 estimate cuts were greater than we have seen in the comparable periods of other recent quarters.

Since the start of the quarter, estimates have come down for 13 of the 16 Zacks sectors, with the biggest declines for the Transportation, Autos, Energy, Construction, and Basic Materials sectors. The only sectors experiencing favorable revisions in this period are Aerospace, Utilities, and Consumer Discretionary.

Estimates for the two largest earnings contributors to the index – Tech & Finance – have also declined since the quarter began.

Tech sector earnings are expected to be up +12.1% in Q2 on +11.0% higher revenues. While these earnings growth expectations are materially below where they stood at the start of April, the revisions trend appears to have notably stabilized lately, as we have been flagging in recent weeks.

The two charts above show that estimates for the Tech sector have stabilized and are no longer under the type of downward pressure experienced earlier in the quarter. The Tech sector is much more than just any other sector, as it alone accounts for almost a third of all S&P 500 earnings.

The Earnings Big Picture

The market’s rebound from the post-tariffs April lows has been very impressive, likely suggesting that market participants don’t see the tariff uncertainty as presenting a significant threat. We find ourselves a bit skeptical of this sanguine view. Whatever the final level of tariffs turns out to be, it will have an impact on the earnings picture.

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