J.P. Morgan Chase & Co. (JPM): 2Q26 EPS: Higher estimates on increase PPNR guidance and capital markets strength

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J.P. Morgan Chase & Co. (JPM): 2Q26 EPS: Higher estimates on increase PPNR guidance and capital markets strength

Goldman Sachs J.P. Morgan Chase & Co. (JPM)

previously). The all-in NII guidance is 1% above pre-earnings GSe, or up 10% YoY,

with key drivers including: 1) the impacts of a steeper short and long end of the

market forward curve: 2) better deposit growth, in particular in wholesale deposits

(which they believe may be AI financing-related to some degree), as well as strong

checking account growth; 3) outperformance of NII vs. their modeled rate sensitivity,

given outperformance on consumer deposit betas; 4) changes in Markets balance

sheet composition; and 5) increased equity allocation to Markets, driving Markets

NII. We increase 2026E/27E/28E NII by 1%/4%/3%, with 2026E/27E/28E NII at

$105.5bn/$114.2bn/$121.3bn.

n Fees / capital markets: Trading was 17% higher than consensus, on 49% higher

Equities, partially offset by 3% worse FICC. The 35% YoY growth in trading came in

above the intraquarter guidance of up 11% or better YoY. We assume that robust

trading has modest scope to grow going forward from current levels, although for

growth to moderate, and model +22%/-1%/+1% YoY in 2026E/27E/28E. IBanking

was 14% higher than the Street, and up 30% YoY, vs. guidance for up 10% or better

YoY, mainly led by 25% higher ECM, 19% higher DCM and 1% higher Advisory.

Management noted that robust client activity has continued, although noted that

the Equities results this quarter may not repeat. In IBanking, they noted that

pipelines remain robust. The company noted strength, highlighting factors, including

in Asia, including Korea, as well as from strong ECM trends. Factoring in stronger 2Q

results, and the constructive outlook, we increase 2026E/27E/28E fee revenue by