JPMorgan Chase & Co. reported better-than-expected 1Q results driven by top-line growth aided by strong banking and markets revenue.
JPMorgan’s (JPM) 1Q diluted earnings more than quadrupled to $4.50 per share on a year-over-year basis and easily beat Street estimates of $3.10 per share. Revenues jumped 14% to $33.1 billion and came in well ahead of analysts’ expectations of $30.52 billion.
The company’s non-interest income grew 39%, mainly driven by strong corporate & investment bank (CIB) markets revenue and higher investment banking fees. Meanwhile, net interest income declined 11% due to lower rates. The provision for credit losses was a net benefit of $4.2 billion in the quarter driven by net reserve releases of $5.2 billion.
JPMorgan’s non-interest expense surged 12% year-over-year to $18.7 billion. (See JPMorgan stock analysis on TipRanks)
JPMorgan CEO Jamie Dimon commented, “With all of the stimulus spending, potential infrastructure spending, continued Quantitative Easing, strong consumer and business balance sheets and euphoria around the potential end of the pandemic, we believe that the economy has the potential to have extremely robust, multi-year growth.”
Following the 1Q results, Oppenheimer analyst Chris Kotowski maintained a Hold rating on the stock.
According to Kotowski, “Similar to the 4Q20 call, management addressed the expiration of Fed’s temporary SLR relief, noting that JPM has not been managed to match the temporary exemption, but the expiration unfairly penalizes not only the banks earnings but also their ability to satisfy market demands. We are not assuming any relief, but JPM would clearly benefit from a rationalization of regulations that would level the playing field.”
The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 11 analysts suggesting a Buy, 5 analysts recommending a Hold, and 1 analyst suggesting a Sell. The average analyst price target of $165.73 implies 10.8% upside potential to current levels. Shares have increased 66.6% over the past year.