ZACKSยท2025-08-14 00:06Core Viewpoint - Investor sentiment is optimistic regarding potential interest rate cuts by the Fed, particularly benefiting financial sectors like banks, with JPMorgan and Citigroup as key interests [1][2]. Financial Health - Both JPMorgan and Citigroup have strong capital positions, performing well in the 2025 Dodd-Frank Act stress tests, indicating their ability to withstand economic downturns [3]. - JPMorgan's CET1 Capital Ratio stands at 15%, while Citigroup's is at 13.5%, both significantly above the minimum requirement of 4.5% [4]. - JPMorgan has over $4 trillion in total assets and $350 billion in shareholders' equity, with a new $50 billion share repurchase plan and a 7% increase in quarterly dividends to $1.50 per share [5]. - Citigroup has raised its quarterly dividend by 7% to $0.60 per share and authorized a $20 billion share repurchase plan, maintaining a net cash position of over $400 billion [6]. Earnings Estimates - JPMorgan's FY25 EPS estimates have increased by 5% from $18.53 to $19.50 in the last 30 days, with FY26 estimates rising by 3% from $19.75 to $20.38 [9]. - Citigroup's FY25 and FY26 EPS estimates have risen by approximately 4% in the last month, projecting over 27% annual earnings growth for the foreseeable future [10]. Conclusion - The outlook for JPMorgan and Citigroup is favorable due to strong capital positions, ongoing shareholder rewards through dividends and buybacks, and rising EPS revisions, especially with the anticipation of a September rate cut [11].