Shares of JP Morgan Chase (NYSE:JPM) fell in pre-market trading as the bank reported mixed Q2 results. The bank reported adjusted earnings of $4.40 per share in the second quarter, falling short of consensus estimates of $5.88 per share.
JPM generated revenues of $51 billion in the second quarter, an increase of 20.4% year-over-year, beating analysts’ expectations of $42.2 billion.
JPM CEO Warns of Future Risks
The bank’s CEO, Jamie Dimon, warned of future risks such as higher inflation and interest rates, despite current stock and bond valuations suggesting a “benign economic outlook.” He noted that the current geopolitical situation remained complex and is potentially the most dangerous since World War II. Furthermore, Dimon mentioned that while inflation had declined somewhat, challenges remained in terms of widening fiscal deficits, infrastructure needs, trade restructuring, and global remilitarization.
JPM’s Revenue Breakdown
JP Morgan’s investment banking fees jumped by 50% year-over-year to $2.3 billion, exceeding Street estimates by around $300 million. JPM’s revenues from equity trading increased by 21% year-over-year to $3 billion, topping Street expectations by $230 million, while trading from fixed-income securities rose by 5% to $4.8 billion.
Overall, net interest income (NII) was up by 4% to $22.9 billion and made up more than 40% of the bank’s total revenues in the second quarter.
Is JPM a Buy or Sell?
Analysts remain cautiously optimistic about JPM stock, with a Moderate Buy consensus rating based on 15 Buys and six Holds. Over the past year, JPM has surged by more than 40%, and the average JPM price target of $214.31 implies an upside potential of 3.3% from current levels. However, these analyst ratings are likely to change following JPM’s Q2 results today.
