JPM Stock Rises Following the 2023 NII Projection Increase, and Q1 Earnings Beat

JPM Stock


The stock price of JPMorgan Chase (NYSE:JPM) jumped by 6% in Friday’s premarket trading after the megabank announced a boost to its net interest income projection for 2023 and easily surpassed Wall Street’s expectations for first-quarter profits and sales. As a result, JPM stock surged.

According to CEO Jamie Dimon, U.S. consumer purchasing is robust, household balance sheets are solid, and corporate conditions remain favorable. But the clouds we’ve been watching for the last year are still out there, and the turbulence in the banking system just heightens the dangers.

Total net interest income for the year is now projected to be $81B for JPMorgan, up from $73B. In addition, it predicts FY2023 NII of $81B, up from the earlier forecast of $74B when CIB markets are excluded.

After accounting for inflation, the projected cost in 2023 remains at $81B.

Earnings per share (EPS) for Q1 came in at $4.10, much above the average analyst forecast of $3.41 and up from Q4’s $3.57 and Q1’s $2.63.

The company’s adjusted revenue of $39.34B was higher than the average estimate of $35.77B, up from the $34.55B reported in the previous quarter and the $30.72B reported in Q1 2022.

Due to increasing structural expenditure and sustained investments in the company (i.e., compensation reflecting headcount growth and salary inflation), Q1 noninterest expense was $20.11B, up from $19.02B in Q4 and from $19.19B in Q1 2022.

Credit loss provisions were $2.28B, down from $2.29B in the previous quarter and up from $1.46B a year ago, reflecting a greater likelihood of a modest downturn due to tighter financial conditions.

A net interest income of $20.7B compared to the $18.8B expected by the market, according to Visible Alpha, $20.2B in Q4 and $13.9B in Q1 2022.

Total noninterest income in Q1 was $17.6B, up from Q4’s $14.4B and the first quarter of 2016’s $ 16.8 B.

Total loans in Q1 were almost unchanged at $1.13T compared to the previous quarter, while total deposits in Q1 rose by 1.6% Q/Q to $2.38T.

Profit and loss from each segment in Q1:

  • Earnings of $5.24B, up from $4.56B in Q4 and $2.91B in Q1 2022; sales of $16.5B from Consumer & Community Banking vs. $15.8B in the previous quarter and $12.2B in the year-ago quarter.
  • Net income of $4.42B increased by 33% Q/Q and 1.1% Y/Y, while revenues of $13.6B increased by 28% Q/Q and 0.2% Y/Y in Corporate & Investment Banking.
  • The Commercial Banking division brought in $3.51B in revenue, up 3% sequentially and 46% year; net income of $1.35B, down 5% from Q4 but up 58% from Q1 2022.
  • Revenue in Asset & Wealth Management was $4.78B, up 4% sequentially and 11% annually; net income was $1.37B, up 21% sequentially and 36% annually.

The conference call is at 8:30 a.m. ET

Revenue of $38.3 billion was $2.53 billion more than expected, while earnings per share of $4.10 was $0.69 higher than expected.

Featured Image: Unsplash @ IKECHUKWU JULIUS UGWU

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About the author: I'm a financial journalist with more than 1.5 years of experience. I have worked for different financial companies and covered stocks listed on ASX, NYSE, NASDAQ, etc. I have a degree in marketing from Bahria University Islamabad Campus (BUIC), Pakistan.