JPMorgan Shares Decline Amid Earnings Concerns
JPMorgan Shares Decline Following Warning on Earnings Outlook
JPMorgan Chase has witnessed a significant decline in its stock, falling by more than 5% on Tuesday after the bank's president, Daniel Pinto, expressed concerns over inflated earnings expectations. Pinto highlighted that the analyst consensus for 2025 NII (net interest income) predicts a decline from $91.5 billion to $90 billion, suggesting that such projections are unrealistic given the anticipated reductions in interest rates.
Impact on the Banking Sector
This pessimistic outlook not only affected JPMorgan but also led to a sell-off among major US banks, including Goldman Sachs and Citigroup. Pinto refrained from specifying what NII might actually be for 2025 but noted that the current consensus is overly optimistic.
- Pinto pointed out the challenges in generating revenue from investment banking and trading.
- The overall sentiment reflects caution among investors regarding large banks' profitability amidst fluctuating rates.
Challenges Ahead for Major Banks
Goldman Sachs and Citi also reported expected declines in trading revenues, further stressing investor sentiment. With the market reacting, JPMorgan shares closed down 5.2%, marking their largest drop since June 2020.
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