Differences Between Reported Earnings and Trefis Estimates For JPMorgan Chase

by Trefis Team
+5.70%
Upside
131
Market
138
Trefis
JPM
JPMorgan Chase
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JPMorgan (NYSE: JPM) reported its Q4 2019 results earlier this week, and the diversified banking giant surpassed consensus estimates for earnings and revenues by a large margin. It reported Total Revenues of $28.3 billion – up by 9% y-o-y thanks to a 31% y-o-y jump in Corporate & Investment Banking revenues and a 3% increase in Consumer & Community Banking revenues, partially offset by a 3% y-o-y decrease in Commercial Banking segment. Notably, the growth in revenues for the Corporate & Investment Banking segment can be attributed to an 86% y-o-y increase in revenues from fixed income markets (Fixed Income, Currency, and Commodity trading). Below, we highlight the differences between our estimates for JPMorgan’s revenues and earnings for full-year 2019 and the actual reported numbers.

Given the stronger-than-expected performance, we have increased our forecast for the bank’s revenues and earnings in 2020 and revised our estimate for JPMorgan’s valuation upward from $124 to $138, as detailed in our interactive dashboard.

Actuals Were Well Ahead Of Trefis Estimates For Revenues & Earnings

JPMorgan posted revenues of $115.6 billion for full-year 2019, which was 1% higher than the Trefis forecast of $114.7 billion. Further, it reported an EPS figure of $10.72 for the year, 6% more than our EPS estimate of$10.12. The primary reasons for this difference are:

  1. Strong growth in Sales & Trading revenues, which were 11% higher than our forecast
  2. A sizable reduction in Total Expenses, which were 2% below our forecast

We estimate JPMorgan’s stock (shows cash and valuation analysis) to have a fair value of $138, which is slightly higher than the current market price.

Trefis shines the spotlight on key assumptions and data for JPMorgan, and our hypothesis lays out one possible set of expectations. You can chime in with your expectations for full-year 2020 and understand the impact on JPMorgan’s valuation in our interactive dashboard.

 

See all Trefis Price Estimates and Download Trefis Data here

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