JP Morgan Chase Tops Q2 Expectations: What to Know

A large banner with the words "J.P. Morgan" handing on windows outside of J.P. Morgan headquarters in London. — (Image credit: Mike Kemp/In Pictures via Getty Images)

JP Morgan Chase (JPM) stock is down slightly in early trading Friday after announcing second-quarter earnings results that topped analysts’ expectations.

In the quarter ended June 30, JP Morgan’s revenue increased 20.3% year-over-year to $51 billion and its net income jumped 25% year-over-year to $18.1 billion. Excluding certain items, its net income came in at $13.1 billion, or $4.40 per share.

“The Firm performed well in the second quarter, generating net income of $13.1 billion and a ROTCE (return on average tangible common shareholder’s equity) of 20% after excluding a net gain on our Visa shares, a contribution to the Firm’s Foundation and discretionary securities losses,” JP Morgan CEO Jaime Dimon said in a statement.

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The results handily beat analysts’ expectations. Wall Street was anticipating revenue of $49.9 billion and earnings of $4.19 per share, according to CNBC.

JP Morgan reiterated that it will be increasing its dividend by 8.7% in the third quarter, which it first announced on June 28 following the Federal Reserve stress test process. The new quarterly dividend rate will be $1.25 per share, subject to approval by its Board of Directors at the time the next dividend is declared.

“Last month, we announced that the Board intends to increase our common dividend for the second time this year, resulting in a 19% cumulative increase compared with the fourth quarter of 2023,” Dimon said. “This increase is supported by our strong financial performance and represents a sustainable level of dividends. Our priorities remain unchanged. We continue to invest heavily into our businesses for long-term growth and profitability. We maintain a fortress balance sheet and prepare the Firm for a wide range of potential environments.”

In the June 28 release, JP Morgan also announced the approval of a $30 billion share repurchase program, which took effect on July 1. Stock buybacks are another way for corporations to boost value for shareholders.

“The new share repurchase program provides additional flexibility to return excess capital to our shareholders over time, as and when appropriate,” Dimon said.

Is JPM stock a buy, sell or hold?

Wall Street is bullish on the Dow Jones stock. According to S&P Global Market Intelligence, the average analyst target price for JPM stock is $212.60, representing implied upside of over 3% to current levels. Additionally, the consensus recommendation is a Buy.

Financial service firm CFRA is one of the more bullish outfits on JPM stock with a Buy rating and an upwardly-revised price target of $230 following the earnings release.

“Loan revenue was $1.9 billion, up 11% Y/Y, and investment banking revenue was $2.5 billion, up 46% from last year's weak results. Equity underwriting revenue was up 56% Y/Y and 39% Q/Q, while debt underwriting was up 51% Y/Y, but only up 1% Q/Q,” CFRA director of equity research Kenneth Leon said in a note Friday morning. “Advisory fees, such as M&A fee revenue, were up 45% Y/Y and up 31% Q/Q. In June, JPM's board of directors authorized a 9% dividend increase.”

CFRA’s $230 price target represents implied upside of more than 11% to current levels.

Other big banks report earnings

Wells Fargo (WFC) and Citigroup (C) reported earnings Friday morning as well, as the banks kicked off the earnings calendar for this season.

Wells Fargo topped estimates with revenue of $20.7 billion and EPS of $1.33, versus expectations of revenue of $20.3 billion and earnings of $1.29 per share. Citigroup also reported a beat with revenue of $20.1 billion and EPS of $1.52 versus expectations of revenue of $20.07 billion and earnings of $1.39 per share.

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.