JPMorgan Ups View, Expects Q2 IB Revenues to Rise 25-30%

Troy Rohrbaugh, the co-CEO of JPMorgan's JPM Commercial & Investment Bank ("CIB") segment, has provided an updated outlook for the bank's investment banking ("IB") revenues. At the Morgan Stanley US Financials, Payments & CRE Conference, Rohrbaugh said that IB revenues are likely to increase 25-30% in the second quarter of this year, driven by robust capital markets performance.
This view moved up from the prior guidance provided by the company in May. Last month, JPM forecasted IB revenues to increase in the mid-teen percentage in the second quarter.
Rohrbaugh stated, "Capital markets continues to be extremely robust and the overall franchise has improved."
Likewise, the bank's markets revenues are expected to improve slightly more than the previously mentioned mid-single-digit growth.
Notably, in the first quarter of this year, JPM's total IB fees grew 21% from the prior-year quarter to $2 billion. Its equity underwriting fees jumped 51% and debt underwriting fees were up 58%. However, advisory fees declined 21% year over year.
On the contrary, markets revenues declined 5% year over year to $5.8 billion in the last reported quarter. Specifically, fixed-income markets revenues were down 7% to $5.3 billion, while equity trading numbers were stable at $2.68 billion.
JPMorgan continues to rank #1 for global IB fees. Driven by a healthy IB pipeline and active M&As, we expect the company's IB revenues to improve, going forward. We project IB revenues in the CIB segment to see a CAGR of 4.8% by 2026.
A couple of weeks ago, Bank of America BAC also provided an outlook for second-quarter IB revenues. Per the bank's CEO, Brian Moynihan, IB revenues are expected to grow 10-15% year over year.
Moynihan also said that BAC's trading revenues would grow at a low-single-digit percentage in the second quarter. Robust equity market performance will likely be partially offset by stable fixed-income revenues.
In the past six months, JPM shares have gained 16.8% compared with the industry's 11.2% growth.

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At present, JPMorgan carries a Zacks Rank #3 (Hold).
A better-ranked stock from the same space is BankUnited, Inc. BKU. Its earnings estimates for 2024 have been revised 5.3% upward over the past 60 days. BKU shares have gained 28% in the past year. Currently, BankUnited carries a Zacks Rank #2 (Buy).

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