J.P. Morgan Chase (JPM) posted strong profitability in the first half of 2025, supported by slightly higher net interest income and a lift in non-interest income from April’s market volatility—helping offset the absence of last year’s one-time Visa transaction gain.
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The bank has proven it can weather Fed rate cuts effectively, but analysts see limited earnings growth ahead in 2026, as the volatility tailwinds that boosted H1 results are unlikely to repeat. With shares also trading at a premium to both large and smaller peers, I believe a Hold rating is appropriate at current levels.
J.P. Morgan Chase H1 2025 Earnings Overview
J.P. Morgan Chase reported earnings per share of $10.31 in the first half of 2025, down 2.4% year-over-year. Despite the 1% Fed rate cuts implemented between September and December 2024, the bank managed well, with its asset-liability spread holding at 1.95% in H1 2025, up 0.02% from the prior year. This helped drive a 1.4% increase in net interest income.
On its Q2 2025 earnings call, J.P. Morgan Chase guided for net interest income (ex-Markets) of around $92 billion, supported by shifts in the forward curve and robust deposit growth within Payments and Security Services.
Non-interest income also benefited from strength in capital markets businesses such as investment banking and asset management. However, on an absolute basis, it declined $2.6 billion (5.5%), reflecting the absence of last year’s $7.9 billion Visa gain. With slightly higher provisions for credit losses, ROTCE came in at 21%, down four points year-over-year but still comfortably above the 17% long-term average achieved over the past decade.
JPM closed H1 2025 with a tangible book value of $103.40 per share and a CET1 capital ratio of 15.1%, representing a solid 2.8% buffer above its 12.3% regulatory requirement.
The Outlook for J.P. Morgan in 2026
Looking ahead to 2026, Fed funds futures imply another 1.25% in rate cuts by year-end, which could pressure J.P. Morgan’s asset-liability spread and weigh on net interest income. Still, the bank is well-positioned to offset some of the impact. Interest-bearing deposits have risen to 75.8% of total deposits (Q2 2024: 72.5%), giving JPM flexibility to reduce deposit rates in step with Fed policy. Combined with a conservative 55% loan-to-deposit ratio, the bank retains room to be aggressive on deposit pricing, supporting net interest income resilience.
The bigger challenge for 2026 may be a normalization in capital markets activity. Investment banking revenues rose 10% YoY in H1 2025, while asset management fees climbed 17%, boosted by April’s unusual volatility—a tailwind unlikely to repeat.
Consensus estimates reflect this backdrop: EPS is projected to rise from $19.29 in 2025 to $20.55 in 2026, just 6.5% growth, despite JPM retaining 29% of earnings over the past twelve months to fund expansion. This points to muted earnings momentum in the near term.
Other headwinds for the stock include a 5% year-over-year decline in Home Lending revenue, primarily due to lower net interest income. Credit costs also weighed on results, totaling $2.8 billion, consisting of $2.4 billion in net charge-offs and a $439 million net reserve build.
Uncertain J.P. Morgan Valuation
After a strong rally in 2025, J.P. Morgan shares now trade at about 14.4x expected 2026 earnings, or 2.86x price-to-tangible book. While that looks attractive relative to the S&P 500’s 24.2x forward P/E, JPM still carries a notable premium compared to peers such as Citigroup (C) at 9.7x and U.S. regional banks around 12x forward earnings.
Overall, JPM remains well capitalized and has demonstrated resilience in managing Fed rate cuts. However, earnings growth is likely to remain muted in 2026 as capital markets activity normalizes. On balance, I believe a Hold rating is appropriate at current levels.
In short, JPM could outperform if financial market volatility returns in 2026, but may lag more cheaply valued peers under the base case of gradually improving U.S. GDP growth. The Federal Reserve projects U.S. GDP to accelerate from 1.4% in 2025 to 1.6% in 2026 and 1.8% in 2027, reaching long-term potential—though this outlook may be revised lower given weak employment growth, partly tied to reduced immigration.
Is JPM a Buy, Hold, or Sell?
Turning to Wall Street, J.P. Morgan Chase earns a Moderate Buy consensus rating based on 19 analyst ratings. Currently, 11 analysts are bullish, six are neutral, and two are bearish. Additionally, the average JPM stock price target of $306.44 implies almost 4% upside potential over the next twelve months.
Muted Growth Outlook Keeps J.P. Morgan Stock at Hold
J.P. Morgan Chase posted solid earnings in H1 2025, with modestly higher net interest income and strong capital markets activity helping offset the absence of the one-time Visa gain that boosted results in H1 2024.
Looking ahead to 2026, the bank appears well-positioned to handle further Fed rate cuts, as the rising share of interest-bearing deposits gives it flexibility to adjust funding costs in line with monetary policy shifts.
That said, earnings growth is likely to be muted next year, with the exceptional volatility of April 2025 unlikely to repeat. Against this backdrop, JPM’s forward P/E of 14.4x looks elevated compared to both large and smaller peers—supporting a Hold rating on the shares.