At the Bank of America Financial Services Conference, JPMorgan’s JPM newly elected chief operating officer, Jennifer Piepszak, provided a sneak peek into how the capital markets business is expected to perform in the first quarter of 2025. 

Further, at a separate investor conference, Jeremy Barnum, JPM’s chief financial officer, noted that net interest income (NII) is projected to trough by the middle of the year and rise thereafter. He, at the UBS Financial Services Brokers Conference, said, “No meaningful change there” related to the guidance provided earlier. On the fourth-quarter 2024 conference call on Jan. 15, the company anticipated NII (excluding markets) to be $90 billion, down 2.2% from $92 billion in 2024. 

On the other hand, Bank of America BAC projects NII to rise 6-7% this year, with modest growth in loans and deposits. Further, Citigroup C anticipates 2025 NII (excluding Markets) to be slightly up from $54.1 billion in 2024.

JPM’s IB and Markets Revenues in Q1

Piepszak stated that investment banking (IB) fees in the ongoing quarter will grow in the mid-teens range year over year. This is expected to be driven by “healthy” equity markets and debt issuances and the resurgence in IPOs.  Further, mergers and acquisitions (M&As) “will take some time to play out” but the company is optimistic about the advisory business being a “tailwind” throughout the year. In the first quarter of 2024, IB fees (in the Commercial & Investment Bank segment) were $2.22 billion.

Speaking about markets revenues, Piepszak noted that momentum “has continued into the first quarter.” The metric is expected to be up in low double digits on a year-over-year basis. In the last year quarter, fixed income markets and equity markets revenues were $5.43 billion and $2.59 billion, respectively.

Like JPM, its peers, including BAC and C, are also expected to record solid performance in the capital markets business.  

Apart from these two major revenue generators, Piepszak provided insights into the lending scenario. The demand for loans remains subdued majorly because of relatively higher rates. Nonetheless, there are green shoots visible “in infrastructure and data centers,” and office space. Further, she added, “Multifamily is still in high demand.”

Here’s How to Play JPM Stock Now

Robust IB and markets revenue growth are expected to support JPM’s top line, while NII growth is likely to be subdued due to weak loan demand in the first quarter of 2025. Because of this, analysts are bearish on the company’s quarterly performance. The Zacks Consensus Estimate for earnings for the ongoing quarter of $4.54 suggests a 2% decline from the prior-year period.

Nonetheless, JPMorgan’s leadership position in several businesses and strategic plan to expand its footprint globally gives it an edge over its peers. Its focus on building a solid deposit franchise and bolstering its loan book positions it well for future growth. 

Additionally, shares of JPM have gained 14.8% this year compared with the industry’s rally of 12.3%.
 

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At present, JPMorgan sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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