JP Morgan beat the market again with a robust quarter, supported by investment banking, trading and an improvement in asset quality. But behind that solid photo appears a limit that today weighs more on the valuation, such as the cut in the interest income guide and a stock that is already trading well above its peers.
And the bank delivered a balance sheet that, at first glance, has almost everything that Wall Street is looking for. In the first quarter of 2026, it reported a EPS of US$5.94, with a growth of 17% year-on-yearand surpassed the consensus mainly due to the contribution of trading. The revenue grew 10%, until located around US$50,540 million, also above market expectations. The investment banking business showed very strong momentum, the commercial front continued to grow and asset quality improved.
However, the stock fell 0.8% after the report and that movement pretty well sums up what the underlying discussion is today.
According to Allaria’s report, JP Morgan continues to show higher profitability than the large US banks, but it does not look cheap. The consensus surveyed by the brokerage house shows a recommendation distributed between 55% “buy” and 45% “hold”, no Sell recommendations, although with a price average target of US$327.31 against a quote of US$310.6. Translated into numbers, the upside potential is just 5.4%.
A quarter that once again showed the weight of the bank
The operating numbers were strong and Allaria highlights that the bank’s income amounted to US$49,836 million, against US$45,310 million from the same period last year, with an improvement of 10% year-on-year. Of that total, non-interest income grew 11%, until US$24,470 million, while the NII, or net interest income, advanced 9% until US$25,366 million.
The revenue were from US$50,536 million against an expectation of US$48,745 million, a positive difference of 4%. He NII came to US$25,479 million versus a consensus of US$25,303 million. He net income closed in US$16,494 million, which involved a 11% deviation in front of the US$14,801 million what the market expected. He pretax income was from US$21,179 million, also above the consensus, while the ROE was located in 19% in front of 17.54% expected, and the ROA reached 1.41% against 1.35%.
These are figures that show a very profitable bank even in a more demanding context for the financial sector.
At Consumer & Community Banking, the Banking & Wealth Management business generated US$10,577 million, with an improvement of 3% year-on-year. Home Lending contributed US$1,232 million, with a rise of 2%, while Card Services & Auto reached US$7,759 million, growing 13%.
But the big driving force was on the corporate and markets front. Within Corporate & Investment Bank, the Banking & Payments line climbed to US$10,425 million, with a 19% improvement year-on-year, and Markets & Securities Services advanced to US$12,954 million, also with a 19% increase. In Asset & Wealth Management, net income was US$6,374 million, with a 11% improvement.
Allaria details that the commissions grew 16%, driven by mainstream transactions and investment banking. Within that block, the banking commissions of investment rose 28% year-on-year and also improved 23% compared to the previous quarter. There were advances in advisory, debt (DMC) and equity capital markets (ECM): consulting +23%, DCM +28% and ECM +13% versus the previous quarter.
Asset, deposit and credit quality
The provision for credit losses fell to US$2.5 billion and, in the quarterly comparison, that implies a reduction of US$2.2 billion, although Allaria clarifies that in the previous quarter a reserve of equal magnitude linked to the commitment to purchase Apple’s card portfolio had been weighed. Excluding that effect, the provision was similar. Even so, the data serves to show that a negative surprise did not appear in terms of credit.
The indicators of blackberry They also accompanied, the NCO ratio decreased 5 basis points up to 0.67%. In credit cards, NCOs increased 32 basis points to 3.46%, although they were 16 basis points below the year-on-year level. In consumption fell 2 basis points up 0.19%, while in wholesalers they fell 17 basis points to 0.06%.
He bad debt ratio improved 2 basis points up 0.66% and non-performing loans in dollars fell 3% year-on-year until US$10.1 billion.
The anchoring front also left positive signs since the average deposits grew 7% year-on-year until US$2,676 billion, surpassing in 4% what the consensus expected. The loans they advanced 11% until US$1,504 billion, also above forecasts. In the detail of deposits in the United States, Allaria mentions that the NIBD rose 1% and IBD advanced 3%.
Valuation is the real brake
JP Morgan kept his projections for 2026, but reduced its NII guidance. The new estimate marks US$103,000 million of net interest income for the year, when previously expected US$104.5 billion. He NII ex Markets was projected in US$95,000 million, a figure that, although positive compared to the consensus of US$94.1 billion, It did not prevent the market from focusing on the cut compared to the previous guide. At the same time, the bank projects US$8,000 million of NII implicit in Markets, well above the US$3.3 billion in 2025, and foresees expenses adjusted by US$105,000 million, with a increase of 9% year-on-year.
Added to this is the more cautious tone of Jamie Dimon The CEO spoke of an “increasingly complex set of risks” on the international economic scene, including geopolitical tensions, wars, energy volatility, unclear trade policies, high fiscal deficits and high asset prices. In a bank that usually functions as a thermometer of the American financial system, that comment is not a minor detail.
However, even with that more uncertain framework, what weighs most is the valuation. Allaria affirms that today JP Morgan is trading at 20.15x forward P/E, level that is 36% above its historical average and clearly above the financial sector multiple, what round 14.15x. In the comparative table of large banks, JP Morgan appears with a P/BV 2026 of 2.32x and a P/E 2026 of 14.47x, against averages of 1.95x and 13.73x, respectively.
For 2027, multiples remain high: P/BV of 2.18x and P/E of 13.35x.
Their peers are located like this:
- Bank of America It is listed with P/BV 2026 of 1.31x and P/E 2026 of 12.27x.
- Wells Fargo, with 1.53x and 12.24x.
- Citigroup, with just 1.08x and 12.08x.
- Goldman Sachs appears closer in valuation, with 2.39x P/BV 2026 and 14.94x P/E 2026
- Morgan Stanley it is located even higher in some ratios, with 2.62x and 15.74x
Even so, Allaria highlights that JP Morgan maintains the highest profitability among the main banking entities, which justifies part of the premium, although it is not enough to erase the feeling of demanding price.
What story awaits the action
The story that emerges from the City broker’s report is not one of an imminent decline or operational deterioration.
JP Morgan continues to show a very healthy business, with estimated sales of US$196,188 million by 2026, a Projected EPS of US$21.68, and a path ascending towards US$23.50 in 2027 and US$26.03 in 2028. It also retains a estimated dividend yield of 1.99% by 2026, which would rise to 2.09% in 2027 and 2.36% in 2028.
The Wall Street giant also arrives with a real increase of 36.22% in 12 monthsa market capitalization of 841,359, a beta of 1.07, a 52 week range between US$226,336 and US$337.25, and a consensus that, for Allaria analysts, go on without registering sales recommendations
