
Wall Street's biggest banks have rallied hard in 2025, outpacing the S&P 500 with an average 18% year-to-date gain, but as second-quarter earnings roll in starting July 15, analysts warn the easy gain may already be priced in.
In a note shared Wednesday, Bank of America analyst Ebrahim H. Poonawala said this earnings season may represent a “breather” for the group.
While structural tailwinds remain strong, especially for names like Citigroup Inc. (NYSE:C) and Wells Fargo & Co. (NYSE:WFC), the absence of fresh catalysts in the second half could slow the pace of gains unless earnings surprises deliver.
Bank | YTD return as of July 9, 2025 |
---|---|
The Goldman Sachs Group, Inc. (NYSE:GS) | 22.94% |
Citigroup Inc. | 22.4% |
Morgan Stanley (NYSE:MS) | 13.84 |
Wells Fargo & Company | 17.44 |
JPMorgan Chase & Co. (NYSE:JPM) | 19.86 |
Bank of America Corporation (NYSE:BAC) | 7.83 |
JPMorgan Sets The Bar—But It's Already High
According to Poonawala, JPMorgan is expected to post earnings per share of $4.48 for the second quarter, slightly above consensus.
Net interest income is expected at $11.96 billion, up 3.4% quarter over quarter, with FY25 guidance revised higher to $95.2 billion.
CFO Jeremy Barnum said 2025 net interest income might "end up a little better, maybe by $1 billion," reflecting fewer expected Fed cuts. But with JPMorgan stock already up sharply by 19% year to date, the market is wondering if the near-term upside is limited.
Citi And Wells Fargo: Underdogs With Upside?
Citigroup could be one of the most interesting stories this quarter. While its second-quarter EPS estimate was trimmed to $1.62 by Bank of America, focus will be on whether its multi-year restructuring plan is finally bearing fruit.
Citigroup's trading revenues, adjusted for a $400 million gain from the sale of Visa shares, are expected to grow more than 17% year over year. The bank reaffirmed full-year revenue guidance of $83.1 billion to $84.1 billion.
Wells Fargo & Co. is entering its first full quarter without the Fed-imposed asset cap. Second-quarter EPS is estimated at $1.42, with full-year net interest income projected at $48.5 billion, representing 1.1% year-over-year growth.
Capital Markets Slowdown A Drag On Morgan Stanley, Goldman Sachs?
Morgan Stanley and Goldman Sachs face tougher comps. Morgan Stanley's second-quarter EPS was cut to $1.96 due to higher provisions and lower net interest income. Still, the bank is seen as stable, supported by strong equity trading and its high-performing wealth management arm, which contributes around 40% of earnings.
Goldman Sachs, on the other hand, is forecast to post an EPS of $9.74, slightly above the consensus.
Strength in trading (+7% YoY) and improving M&A activity are offsetting weaker asset management results. The bank has a $40 billion buyback program and increased dividends to $4.00 per share, reflecting confidence in future performance.
BNY Mellon and Northern Trust: M&A Buzz Builds
M&A chatter is swirling around The Bank of New York Mellon Corp. (NYSE:BK) and Northern Trust Corp. (NASDAQ:NTRS). BNY's Q2 EPS was raised to $1.80, as deposit strength lifts full-year NII growth to 6.8% year over year.
Northern Trust is expected to deliver $2.08 in second-quarter EPS, driven by a strong wealth management business (accounting for 50% of profits) and deposit inflows.
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