Barclays Previews Earnings For J.P. Morgan Chase And Wells Fargo

Barclays issued an earnings preview for JPMorgan Chase & Co. JPM and Wells Fargo & Co WFC Tuesday. Both companies will report earnings on Wednesday before the market open.

Analyst Jason M. Goldberg expected J.P. Morgan Chase to report 4Q14 EPS of $1.35 vs. consensus of $1.31.  

“While it has exceeded consensus expectations in 18 of the past 23 quarters, it has missed four out of the last five (2Q14 being the exception). In our beginning of the year Outlook report, we lowered our 4Q14 EPS estimate by $0.13, primarily reflecting lower trading revenues,” Goldberg noted.

“In addition to weakness in credit and rates, trading revenues are expected to be adversely impacted by the sale of its physical commodities unit (though offset in expenses) and preferred issuance. Still, focus will likely be on expectations for future results and thoughts on typically, albeit declining 1Q seasonality. We also expect JPM to talk to increased G-SIB buffers and the benefits of its scale franchise.”

JPMorgan Chase & Co. was rated Overweight with a $73 price target and recently traded at $59.46, up 1.07 percent.

Goldberg expected Wells Fargo to report operating 4Q14 EPS of $1.02, compared to $1.02 consensus.

“We expect continued NII growth (helped by loan growth and deposit inflows), favorable credit trends, improving core fee income and modestly lower expenses, though tax rate higher/more normalized, and equity investment gains are likely to remain volatile. Continued focus on capital deployment/share repurchase, as well as balance sheet growth should help maintain EPS in a seasonally weaker quarter,” according to the analyst note.

Wells Fargo & Co was rated Overweight with a  $63 price target and recently traded at $52.37, up 0.61 percent.