Analysts expect a positive quarter for bank earnings, with JPMorgan, Goldman Sachs and Wells Fargo kicking off results early Tuesday. JPMorgan on Monday also announced a new initiative to invest in critical industries for U.S. national security.
Investment banking and trading is expected to be strong. AI cost savings for JPMorgan Chase and other banks will be in focus as well. With the government shutdown suspending many economic releases, banks' comments about the U.S. economy will be especially important.
Banks See Strong Summer Gains
Big banks had a "stellar summer," Evercore ISI wrote in a recent note, with stocks rallying about 20% over the season. The firm sees potential for "beat and raise" reports, particularly for JPMorgan and Goldman Sachs. Meanwhile, Truist in late September hiked its earnings estimates for banks. The firm cited improvement in the capital markets environment for investment banking, trading and asset and wealth management.
UBS added that deregulation and solid loan growth have also contributed to bank stock growth since Q2, The Fly reported.
Truist lifted its 2025 and 2026 earnings forecasts for JPMorgan by 20 cents per share. The firm raised its price target on JPM stock to 319 from 290 and kept a hold rating on the shares.
UBS lifted its price target on JPMorgan to 350 from 319 and kept a buy rating. For Goldman Sachs, UBS raised its price target to 805 from 762 and maintained a neutral rating on the stock.
JPMorgan's National Security Investment Initiative
JPMorgan on Monday announced a 10-year plan to facilitate $1.5 trillion in financing and investments for industries critical to U.S. national economic security and resiliency. As part of the Security and Resiliency Initiative, JPMorgan will invest up to $10 billion in various companies via direct equity and venture capital investments.
"It has become painfully clear that the United States has allowed itself to become too reliant on unreliable sources of critical minerals, products and manufacturing — all of which are essential for our national security," CEO Jamie Dimon said in the release. He added that America needs more "speed and investment," while removing obstacles such as "excessive" regulations, bureaucratic delays, partisan gridlock, and an education system mismatched with necessary skills.
JPMorgan plans to focus support on four key areas: supply chain and advanced manufacturing; defense and aerospace; energy independence and resilience; and frontier and strategic technologies.
These focuses span key industries including critical minerals and pharmaceutical precursors, autonomous drones, battery storage and grid resilience, and artificial intelligence, cybersecurity and quantum computing.
The bank said that it plans to offer advice, provide financing, and in some cases invest capital.
Meanwhile, JPMorgan is already seeing some savings from its AI investments, Dimon told Bloomberg TV during an interview last week. Dimon said that JPMorgan spends about $2 billion a year on AI, and is seeing the same amount in cost savings, calling it "the tip of the iceberg."
JPMorgan Earnings
FactSet expects JPMorgan to report about an 11% increase in earnings to $4.85 per share. Revenue is seen rising 5% to $45.47 billion.
Consumer and community banking revenue is expected to increase to $18.72 billion from $17.79 billion last year.
Analysts estimate that commercial and investment banking revenue will rise to $18.1 billion from $17 billion.
Net interest income is expected to rise to $24.13 billion from $23.5 billion.
JPMorgan stock swung 2.4% higher Monday ahead of earnings on the investment news.
Shares rebounded off their 50-day line on the move, to push back above their 21-day line and 10-day line.
JPM stock hit a record high of 318.01 on Sept. 29. JPMorgan has rallied more than 28% so far this year.
Goldman Sachs
FactSet expects Goldman Sachs to report a 31% increase in earnings to $11.02 per share. Analysts predict revenue will grow 11% to $14.12 billion.
Global banking and markets revenue is expected to rise to $9.34 billion from $8.55 billion last year.
Analysts predict asset and wealth management revenue will rise to $3.88 billion from $3.75 billion.
Investment banking fees are expected to reach $2.15 billion, growing from $1.87 billion.
Analysts forecast net interest income will increase to $14.12 billion from about $12.7 billion.
Goldman Sachs advanced 3% Monday to rebound above its 10-day and 21-day lines.
GS stock has eased from its Sept. 23 peak of 825.25, but is still up almost 38% in 2025.
Wells Fargo
Analysts estimate that Wells Fargo will report a 9.2% increase in earnings to $1.55 per share on 3.8% revenue growth to $21.15 billion.
FactSet predicts trust and asset management revenue will climb to $3.93 billion from $3.78 billion.
Net interest income is expected to rise to $12.03 billion from $11.69 billion.
Analysts see card income rising to $1.16 billion from $1.1 billion.
Mortgage banking revenue is expected to ease to $247 million from $280 million.
Wells Fargo climbed 1.6% Monday, but is still below its 50-day line.
WFC stock on Sept. 18 broke out above an 83.20 buy point for a cup-with-handle base. However, shares have retreated from the buy zone since the start of October.
WFC stock fell back below its 50-day line last week and nearly triggered the 7% sell rule on Friday. The 2.8% drop on Friday marked a 6.7% decline from the buy point.
Although the cup-with-handle pattern is still technically in play, investors will likely want to wait for a more solid base to form above technical support.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
