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How Often Does JPMorgan Chase Beat Earnings Estimates?

By John Maxfield – Jul 8, 2016 at 11:11AM

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More often than not.

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If the United Kingdom's Brexit vote and the results from this year's stress tests weren't enough, bank investors also have second-quarter earnings season to throw into the mix. Kicking things off is JPMorgan Chase (JPM -1.93%), which is scheduled to report earnings next Thursday, on July 14.

What should investors expect from the nation's biggest bank by assets? According to the consensus estimate among analysts, JPMorgan Chase's earnings per share will decline in the second quarter compared to the year-ago period.

It earned $1.54 per share in the corresponding period last year. This year, it's projected to earn $1.44 per share. That equates to a 6.5% decline. This is disappointing, but it could be worse. For instance, analysts expect earnings at Bank of America and Citigroup to fall by 20% and 23.8%, respectively.

Bank

Expected EPS-2Q16

Actual EPS-2Q15

Expected Change

JPMorgan Chase

$1.44

$1.54

-6.5%

Bank of America

$0.36

$0.45

-20%

Wells Fargo

$1.01

$1.03

-1.9%

Citigroup

$1.15

$1.51

-23.8%

Data source: Yahoo! Finance.

One reason JPMorgan Chase's earnings aren't expected to fall as much as that of Bank of America and Citigroup is because the consensus forecast for the Jamie Dimon-led bank has slightly improved over the past two months. Sixty days ago, analysts believed it would earn $1.42 per share. That increased to $1.43 a month ago and to $1.44 at some point in and around the past week, according to data from Yahoo! Finance.

The upward trend in JPMorgan Chase's anticipated earnings distinguishes the $2.4 trillion bank from the three other multitrillion-dollar banks. Over this same stretch, analysts have reduced EPS expectations for Bank of America, Citigroup, and Wells Fargo.

The question now is whether JPMorgan Chase will beat the consensus estimate, which should dictate the direction of its stock price after earnings. If the bank's actual results exceed its projected results, its stock will be primed to rise and vice versa.

JPMorgan Chase's history in this regard is a mixed bag. Since the beginning of 2011, it has beaten EPS estimates in 15 out of 21 quarters, or 71% of the time. Meanwhile, it has met the consensus estimate once and missed five times.


Data source: StreetInsider.com. Chart by author.

Whether it's able to exceed forecasts in the second quarter of this year remains to be seen. But either way, we'll know for sure when it kicks things off for the nation's biggest banks on July 14.

John Maxfield owns shares of Bank of America and Wells Fargo. The Motley Fool owns shares of and recommends Wells Fargo. The Motley Fool recommends Bank of America and Yahoo. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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