JPMorgan Chase (JPM) Stock: Wall Street Dumps Shares Despite Earnings Win

TLDR

• JPMorgan shares fell 4.2% Tuesday despite earnings of $5.23 per share beating forecasts by 5%
• Year-over-year profits dropped 7% as investment banking fees disappointed Wall Street
• Apple credit card partnership reduced earnings by 60 cents per share, requiring $2.2 billion in reserves
• Revenue of $46.77 billion exceeded analyst expectations of $46.25 billion
• Stock recovered slightly in premarket Wednesday, gaining 0.39% to $312.22

JPMorgan Chase shares tumbled Tuesday despite delivering quarterly results that topped analyst expectations. The stock closed down 4.2% at $310, puzzling investors who expected a rally after the earnings beat.

JPMorgan Chase & Co., JPM

The bank reported adjusted earnings per share of $5.23. That crushed Wall Street’s consensus estimate of $4.86 by roughly 5%. Revenue also exceeded forecasts at $46.77 billion compared to the expected $46.25 billion.

Yet the market sold off aggressively. By Wednesday morning, shares had only recovered to $312.22, up a modest 0.39% in premarket trading.

The disconnect stems from several red flags in the report. Profits declined 7% compared to the same quarter last year. Investment banking fees came in below expectations due to timing issues that rattled analysts.

Apple Deal Weighs on Results

JPMorgan’s newly announced credit card partnership with Apple proved costly. The deal sliced 60 cents off per-share earnings this quarter.

The bank had to establish a $2.2 billion credit reserve to purchase Apple’s existing card portfolio. That’s a hefty upfront cost that directly impacted the bottom line.

Evercore ISI kept its Outperform rating and $350 price target despite the selloff. Analysts labeled the market response as classic “sell the news” behavior for a high-quality stock trading at premium valuations.

The firm pointed to several potential concerns driving the negative reaction. Investment banking fee timing created uncertainty. Management’s commentary on loan and deposit growth lacked enthusiasm. Expense trends remain elevated going forward.

Banking Outlook Stays Positive

Management didn’t sound alarms about the business trajectory. They reaffirmed net interest income guidance that aligns with current Wall Street models.

The investment banking outlook remained constructive heading into 2026. Executives highlighted strong client engagement and described the deal pipeline as healthy.

Evercore ISI emphasized that JPMorgan’s fundamental story hasn’t changed. The firm expects the bank to maintain its reputation as a best-in-class operator in the industry.

CEO Jamie Dimon also made headlines Tuesday with comments about Federal Reserve independence. He criticized the Justice Department’s subpoena of Fed Chair Jerome Powell.

Bank of America, Citigroup, and Wells Fargo report quarterly results Wednesday. The sector will watch closely to determine whether JPMorgan’s results signal broader trends or represent an isolated quarter.

The bank characterized this as an unusual quarter. Investors hope it won’t serve as a preview of what other major banks will report.

Premarket buying suggests some traders viewed Tuesday’s drop as an overreaction. The coming days will reveal whether that optimism is justified based on peer results.

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