In 2025, banks proved the doomsayers wrong. Higher rates were supposed to crush the U.S. consumer—but that never happened. What did change is where growth is coming from: more of the heavy lifting is now being done by fee-based businesses and a rebound in capital markets, while traditional lending has cooled into a more normal range. With the outlook still compelling heading into 2026, I’m staying bullish on JPMorgan (JPM), Bank of America (BAC), and Morgan Stanley (MS) despite their strong run.
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JPMorgan Chase (NYSE:JPM)
Jamie Dimon has a way of sounding like he’s bracing for a storm despite simultaneously building a bigger umbrella than anyone else. Last week, JPM released its Q4 results, and while net income of $13 billion was down slightly year-over-year, the “why” is what matters. They took a massive $2.2 billion reserve build specifically for the Apple Card portfolio they’re inheriting. But that’s alright. They are taking the hit now, securing the asset, and moving into 2026 with a “fortress balance sheet” that has already priced in the risk. And when Mr. Dimon says he’s “vigilant” about inflation, he’s telling you the bank is ready for a 3% neutral rate environment.
The story for 2026 is about how JPM will leverage its sheer gravity to capture market share. They added 1.7 million net new checking accounts and 10.4 million new card accounts over the past year, demonstrating their strength in this regard. The asset management business also performed extremely well, achieving record inflows of $553 billion during the period. In the meantime, management is guiding to abour $103 billion in Net Interest Income (NII) for the full year, suggesting we are looking at another year of high-single to low-double-digit EPS growth against a forward P/E of about 14x — not too crazy, in my view.
Is JPMorgan a Buy, Sell, or Hold?
Today, most analysts are bullish on JPM stock. The stock features a Moderate Buy consensus rating based on 13 Buy, seven Hold, and one Sell ratings assigned in the past three months. In addition, JPM’s average stock price target of $347.35 implies more than 16% upside over the next twelve months.
Bank of America (NYSE:BAC)
For as long as I have followed Bank of America, the stock has felt like the boring sibling of the big banks. But looking at the Q4 numbers, boring is looking very profitable. It posted a 12% jump in net income to $7.6 billion, but what was even more impressive was the guidance. While analysts worried falling rates would kill margins, CFO Alastair Borthwick laid out a case for 5% to 7% NII growth in 2026. That’s a bold signal when others are playing defense, driven by a 12% year-over-year growth in commercial loans.
Improving sentiment seems to now be centered on “operating leverage.” Essentially, Bank of America has been growing its income much faster than its costs, which is a rare feat at this scale. Mr. Moynihan noted that consumer spending grew 5% YoY in 2025, and digital engagement is now so high that they can keep costs in check while the “funnel” pours in cash.
If you’re looking for a reason to stay bullish, look at the $6.5 trillion in total client balances, which should prove a massive foundation for continued EPS growth. Consensus is looking at $4.33 in EPS for FY2026, up 14% year-over-year and implying a forward P/E of just ~12x.
Is Bank of America a Buy, Sell, or Hold?
There are 19 analysts offering price targets on BAC stock via TipRanks. Today, the stock has a Strong Buy consensus rating based on 15 Buy and four Hold ratings over the past three months. No analyst rates the stock a sell. At $61.56, BAC’s average price target implies a ~19% upside over the next twelve months.
Morgan Stanley (NYSE:MS)
After two years of “waiting for the sun to come out,” Morgan Stanley just celebrated a 47% increase in investment banking fees. It successfully pivoted to a wealth management titan, but now that M&A and IPO markets are thawing, the bank is getting the best of both worlds. The bank pulled in $350 billion in net new assets last year, bringing total client assets to $9.3 trillion. That scale generates fee-based flows regardless of what the Fed does next, setting the stage for continued earnings growth in 2026.
The “integrated firm” story is finally clicking. Investment banking introductions are now feeding the wealth business in a closed-loop system. When a tech company goes public through MS, the founders become clients in the Wealth division. With an efficiency ratio of 68% and record revenue and earnings, they’ve proven they don’t need a massive retail lending footprint to dominate once again this year. Wall Street forecasts EPS of abour $11.34 this year, implying a year-over-year growth of 11%, and a reasonable forward P/E of 16x.
Is Morgan Stanley a Good Stock to Buy?
Morgan Stanley is currently covered by 14 analysts on Wall Street, who appear to be fairly bullish on the name. MS stock carries a Moderate Buy consensus rating, based on six Buys and eight Hold ratings over the past three months. No analyst rates MS stock a Sell as well. Furthermore, MS’s average stock price target of $192.33 implies ~7% upside potential over the next twelve months.
Final Thoughts
The big three U.S. banks wrapped up last year on a high note. Whether we’re looking at JPM’s scale, BAC’s consumer resilience, or MS’s capital markets engine, the momentum proved quite powerful. Today, I remain long because these results show that even as the “easy” money from high rates fades, their structural advantages are set to continue to drive excellent earnings growth. In the meantime, valuation multiples remain reasonable, sustaining the possibility for compelling returns moving forward.