Why Is JPMorgan Chase & Co. (JPM) Up 8.7% Since Last Earnings Report?

Core Viewpoint - JPMorgan Chase & Co. reported strong fourth-quarter earnings driven by solid investment banking and trading performance, although net interest income (NII) faced challenges due to lower interest rates [2][6]. Financial Performance - Earnings per share for Q4 2024 were $4.81, exceeding the Zacks Consensus Estimate of $4.03 [2]. - Net revenues increased by 11% year over year to $42.77 billion, surpassing the consensus estimate of $40.96 billion [6]. - Non-interest income rose 34% to $19.42 billion, exceeding the estimate of $16.73 billion [7]. - Net income jumped 50% to $14 billion, significantly above the projected $11.19 billion [8]. Investment Banking and Trading - Investment banking (IB) fees grew significantly, with equity underwriting fees up 54%, debt underwriting fees up 56%, and advisory fees up 41%, totaling $2.48 billion, a 49% increase from the prior year [3]. - Market revenues increased by 21% to $7 billion, with fixed-income markets revenues up 50% to $5 billion and equity trading revenues up 22% to $2 billion [4]. Net Interest Income and Expenses - NII fell 3% year over year to $23.35 billion, attributed to lower rates and a decline in consumer loan balances [6]. - Non-interest expenses were reported at $22.76 billion, down 7%, but up 5% when excluding a prior-year special assessment [7]. Credit Quality - Provision for credit losses decreased by 5% to $2.63 billion, while net charge-offs grew 9% to $2.36 billion [10]. - Non-performing assets increased by 22% to $9.29 billion as of December 31, 2024 [10]. Capital Position - The Tier 1 capital ratio was estimated at 16.8%, up from 16.6% year over year, with a total capital ratio stable at 18.5% [11]. - Book value per share increased to $116.07 from $104.45 a year ago [11]. Share Repurchases - During the reported quarter, JPMorgan repurchased 18.5 million shares for $4.3 billion [12]. 2025 Outlook - The company anticipates mid-teens growth in IB fees for Q1 2025, driven by healthy equity markets and debt issuances [14]. - NII is expected to be approximately $94 billion for 2025, with markets NII projected to support overall growth [15]. - Adjusted non-interest expenses are projected to be nearly $95 billion [16]. Estimate Trends - Recent estimates for the stock have trended upward, with a consensus estimate shift of 6.16% [17]. - The stock currently holds a Zacks Rank 1 (Strong Buy), indicating expectations for above-average returns in the coming months [20].