JPMorgan Chase (JPM) stock slid 4.0% in Tuesday afternoon trading as the bank’s Q4 earnings beat consensus, largely on lower-than-expected operating expenses, according to equity research notes. Meanwhile, 2026 guidance was in line with analysts’ expectations.
Investment banking fees, which fell 5% Y/Y, were disappointing.
The bank also remains under pressure as the Trump administration moves to limit credit card interest and swipe fees, which are strong revenue generators for many banks. During JPMorgan Chase’s (JPM) earnings call, Chief Financial Officer Jeremy Barnum said “everything is on the table” in its efforts to push back against the proposed 10% interest rate on credit cards.
In analyzing the company’s Q4 earnings, Wolfe Research analyst Steven Chubak pointed out that, “Expenses were well controlled, as efficiency of 51.3% came in below WR est./Consensus of 52.2%/52.9%.” Also, net interest income (NII) of $25.0B slightly topped consensus of $24.9B and Wolfe’s $24.8B estimate, resulting from better loan growth and slightly better net interest margin expansion.
Evercore ISI analyst Glenn Schorr points out that “NII continues to be constrained by lower rates, and home lending was still down 4% Y/Y.”
Citi analyst Keith Horowitz credits the ~$0.20 beat on preprovision net revenue to consensus on the improved expense management and the slight beat in NII, ex-markets.
Adjusted for one-time items, “core expense beat was in large part on compensation within CIB (Corporate and Investment Banking),” Horowitz wrote.
Equities trading fees also pitched in to the beat, at $2.9B, beating consensus of $2.7B and Wolfe’s estimate of $2.8B, Chubak noted.
One factor to note, JPMorgan’s (JPM) provision for credit losses of $4.66B, includes a $2.2B reserve taken for its upcoming purchase of the Apple credit portfolio. That reduced its GAAP net EPS by $0.60. Excluding the item, Q4 adjusted EPS was $5.23.
On the negative side of the Q4 ledger, Investment Banking fees were down 5% Y/Y, “slightly worse than conference guidance of up low-single digit; ECM (equity capital markets) was down -16% Y/Y (-21% Q/Q), Advisory was down -3% Y/Y (+12% Q/Q), while DCM (debt capital markets) was down -2% Y/Y (-24% Q/Q),” Evercore ISI’s Schorr wrote in a note to clients.
In looking ahead, analysts call the company’s 2026 guidance largely in line. “We see no real surprises to 2026 guidance with $95B NII, excluding markets, consistent with previous guidance given at 3Q25 earnings, $105B ’26 expense guide maintained, and 3.4% card NCO in-line with implied December guidance range of 3.3-3.6%,” Citi’s Horowitz said.