This blog post will focus on JPMorgan (JPM) and Citigroup (C) with other earnings previews to follow.
Depending upon which source you use, there are either 14 or 18 financial sector companies reporting this coming. LSEG, in their “This Week in Earnings” report, noted on Friday that there are just 14 companies reporting this week, in the entirety.
The point being of the companies that will report this week, the vast majority will be banks and financials.
Tuesday morning, January 13th, investors will get a look at how JPMorgan performed in Q4 ’25, and then on Wednesday morning, January 14th, investors will hear from Citigroup, Bank of America (BAC) and Wells Fargo (WFC), all of these institutions reporting before the market opens.
The backdrop for Q4 ’25 earnings reports is that – just one year ago – President Trump was elected to his second term, and the stock market responded nicely to the expectation for the financial sector of lower capital requirements, not to mention lower overall tax rates and regulations, as well as improved business conditions.
Major banks reported these year-over-year (y-o-y) growth rates for Q4 ’24 in early 2025:
- JPMorgan: 11% net revenue growth and 58% EPS growth with an 11% EPS upside surprise;
- Citi: 12% net revenue growth and 60% EPS growth with a 10% EPS upside surprise;
- Bank of America: 11% net revenue growth and 31% EPS growth with a 12% EPS upside surprise;
(This blog does not model or track Wells Fargo financials).
For the financial sector as a whole – per the LSEG data – here’s how the financial sector performed in terms of y-o-y growth since Q4 ’24:
- Q3 ’25: +25% EPS growth and +8.1% revenue growth;
- Q2 ’25: +14.2% EPS growth and +4% revenue growth;
- Q1 ’25: +5.4% EPS growth and +3% revenue growth;
- Q4 ’24: +35.1% EPS growth and +7.1% revenue growth;
For Q4, 2011 (the first quarter this blog started tracking sector historical growth rates) to Q4 ’19, the financial sector “averaged” +12.9% EPS growth and +3.5% revenue growth.
JPMorgan:
When JPM reports Tuesday morning before the opening bell, the “House that Jamie Built” should report a pretty good quarter, with sell-side analyst consensus expecting $4.95 in earnings per share (EPS) on $46.2 billion in net revenue for expected y-o-y growth of 3% and 8% respectively. If the sell-side consensus estimates are met exactly, JPM’s full-year, 2025 EPS and revenue growth +10% and +3% respectively.
Note the rather modest y-o-y growth rates.
Strong “upside surprises” or beat rates, are expected for the banking giant, as JPM is that almost perfect combination of capital markets, consumer, and commercial bank segments.
The above spreadsheet, taken from this blog’s own work, shows the percentage distribution of JPM by segment.
JPM’s capital markets group (Corp and Investment Banking) is almost half of net revenue and net income as of today. That’s not necessarily a bad thing in a capital markets environment like we are in now, supported by Administration policies, but that segment of the business is more capital market sensitive, and thus subject to sharper swings in net revenue and net income.
In Q3 ’25, JPM printed another quarter of +20% ROTCE (return on tangible common equity) on net revenue growth of +7%, and EPS growth of +16%. Corporate loan growth was just 7% y-o-y, and loan growth has been rather subdued during the last few years of economic growth.
JPM valuation:
JPM is considered one of the most expensive of the major banks, primarily thanks to the tangible book valuation (TBV) of 2.3x TBV as of the last earnings report. However this is offset by the +20% ROTCE which is the highest of the major financial-center banks. The closest major bank to JPM in terms of ROE/ROTCE is Bank of America and that is mid-teens (of the banks this blog follows).
Trading at $329 – $330 per share, and at 16x PE, given expected 5% and 9% EPS growth in ’26 and ’27, JPM is reasonably-valued on a PE basis.
With the lower capital constraints on the banks, which Jamie Dimon railed against as far back as last decade, JPM has reduced their fully-diluted share count by 2% – 3% every year, which is a nice plus for shareholders, plus Jamie has been increasing the JPM dividend of late, from $1.05 per quarter as of late 2023, to $1.50 as of Q4 ’25. It might get hiked again too.
Morningstar has a fair value estimate on JPMorgan of $259, while this blog’s valuation model estimates JPM’s fair value closer to $367, so what i typically do is take the average of the two models and that average is $313 per share.
To sum up JPM in one sentence, the bank is perfectly-positioned within both the economic and political framework that we are faced with in the middle part of this decade. The stock is fairly-valued to modestly-overvalued on the metrics, and has momentum aspects to how it has traded in the last 18 months. Still it’s been a big winner for clients and all shareholders, up 36.74% in calendar 2025.
Citigroup:
When Citigroup reports their Q4 ’25 financial results on Wednesday morning, January 14th, 2026, consensus expectations are looking for $20.6 billion in net revenue growth to generate EPS of $1.67 for expected y-o-y growth of 5% and 25%. If consensus estimates are met for calendar 2025, Citi will have grown net revenue and EPS +3% and +25% respectively.
Like a lot of big banks, Citi’s capital markets group came through, The segment is now 25% of total Citi net revenue, but generated 42% of Citi’s operating income per the data that accompanied earnings. The bank is late to the asset gathering and wealth management game although that looks like it’s starting to change.
Jayne Frasier has a done a good job turning the bank around, but the ROTCE of +9% (compare that to JPM) probably implies there is more opportunity to reduce overhead, and deploy capital better. After the headcount had been reduced from 240,000 in mid-2023, Citi’s current headcount is roughly 227,000. That could probably come down some, or perhaps be better-aligned with some of the growth areas of the bank.
Citigroup valuation:
Trading at $121 per share, Citi is now trading comfortably above both book value ($108.41 per share as of Q3 ’25) and tangible book value (TBV) of $95.72.
A big selling point around Citi’s valuation was that large financial-center banks under book value (let alone tangible book value) were rare and hard to find, but exiting the extreme dilution in 2008 and 2009, and the reverse-splitting the stock in May, 2011, left Citi in no-man’s land where bigger banks were generating faster EPS and revenue growth. Citi’s stock languished in the $40’s and low $50’s from 2013 through 2018, and then when COVID ended, the stock dropped back into this previous trading range, from it’s multi-year high around $80 per share.
The low ROE / ROTCE is an issue but I see Citi as a mirror image of JPM, even as Citi like JPM is now returning capital to shareholders in the form of dividends and share repurchases.
Morningstar’s fair value estimate on Citi is $90, while this blog’s model values at closer to $100, so the average is $95.
The stock’s total return in calendar ’25 was a whopping 69.07%.
Summary / conclusion: With the financial sector performing thew way it has, it’s hard to be even a little bit bearish on the group, given the state of the economy, and the likelihood that consumer and commercial credit metrics will remain in good shape.
Both JPMorgan and Citi have acted “momentumy” in the last few months, with the tailwinds continuing to be favorable for the sector.
Investors could make a good case that there is probably more upside for Citi over the next few years, given the events around 2008 and what happened to the stock in the after-math. Plus Jayne Frazier seems committed to re-positioning the bank’s businesses to reflect move Citi more towards the finance-center business model that the other banks have developed.
Is Wall Street nearing “peak financial conditions” ? Hard to say. It’s looking like 2026 will be another reasonable year for both the economy and the markets.
None of this is advice or a recommendation, but only an opinion. Past performance is no guarantee of future results. All EPS and revenue estimates data is sourced from LSEG I/B/E/S.
Thanks for reading.