Zacks Investment Researchยท2025-08-15 17:06Investment Recommendation - Zacks' equity strategist recommends buying JP Morgan and Citigroup stock in anticipation of potential rate cuts [1][2] - Both JPM and Citigroup stock sport a Zacks Rank number one strong buy [7] Macroeconomic Factors - Investor sentiment anticipates the Fed could cut interest rates in September following optimistic July CPI data [1] - Financials, specifically banks like JP Morgan and Citigroup, could benefit from lower rates and a steepening yield curve [2] Capital Strength and Shareholder Returns - JP Morgan and Citigroup performed well in the 2025 Dodd-Frank Act stress test, indicating strong capital positions [3] - JP Morgan's CCT1 capital ratio is 15%, and Citigroup's is 13.5%, both above the 4.5% minimum requirement [3] - JP Morgan has over $4 trillion in total assets and over $350 billion in shareholders' equity [4] - JP Morgan authorized a new $50 billion share repurchase plan and increased its quarterly dividend by 7% to $1.50 per share [4] - Citigroup authorized a $20 billion share repurchase plan and increased its quarterly dividend by 7% to $0.60 per share [4][5] Earnings Per Share (EPS) Revisions - JP Morgan's fiscal year 2025 EPS estimates have risen 5% in the last 30 days, from $18.53 to $19.50 [6] - JP Morgan's fiscal year 2026 EPS estimates are up 3% in the last 30 days, from $19.75 to $20.38 [6] - Citigroup's fiscal year 2025 and 2026 EPS estimates are up roughly 4% in the last 30 days, projecting over 27% annual earnings growth [6]