Shares of JPMorgan Chase JPM added about 0.4% during regular hours Thursday, the last day of trading before it releases its latest quarterly earnings report. Investors displayed some apathy ahead of the report, but this is certainly still a stock to watch once the full results are in.
Our rising rate environment should be acting as a catalyst for big bank stocks, but instead, a flattening yield curve has led to a sense of malaise in the industry. This could mean that giants like JPMorgan will need to report exceptionable quarterly results in order to reinvigorate investors.
According to our latest Zacks Consensus Estimates, analysts expect JPMorgan to report earnings of $2.22 per share on $27.60 billion in revenue. These results would mark year-over-year growth rates of 22% and 8%, respectively.
Investors should also note the JPM’s consensus earnings projection has fluctuated over the course of the quarter. A few positive revisions have helped the Zacks Consensus Estimate tick two cents higher in the past 90 days, but this estimate is now two cents lower than the peak it reached about 60 days ago. This mixed revision activity has contributed to the stock’s Zacks Rank #3 (Hold).
Looking at share price performance, JPM has added about 15% over the past year. However, the stock has been sluggish as of late and remains essentially flat on a year-to-date basis. More recently, shares have dropped about 2.5% over the trailing 12 weeks.
A strong earnings beat might be what JPM needs in order to start generating positive momentum. To gauge how likely the company is to outperform estimates tomorrow morning, we can turn to our exclusive Earnings ESP figure.
Zacks Earnings ESP (Expected Surprise Prediction) compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter. The Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change.
This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.
A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.
JPM currently has an Earnings ESP of +0.06%. This, combined with its Zacks Rank, make us feel comfortable about its chances at beating earnings estimates on Friday. JPMorgan has notched 10 quarters of earnings outperformance in a row.
Make sure to check back here for our full analysis once JPMorgan reports! Industry rivals Citigroup C and Wells Fargo WFC will also be reporting on Friday morning.
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