When JPMorgan (JPM) posted Q1/2023 results, markets bid JPM stock up by 7.55%. This erased the March to mid-April stock loss.
Investors liked JPMorgan’s net interest income outlook for 2023. The bank expects an NII of around $81 billion. This is sharply higher than the $73 billion prior view. In Q1, JPMorgan posted earnings of $4.10 a share, exceeding the $3.41 analyst estimate.
JPMorgan is faring better than the other banks on loss estimates. It has a provision for credit losses of $2.28 billion, up from $1.46 billion last year.
The rally in JPM stock lifted Bank of America (BAC).
Citigroup (C) posted revenue growing by 12% to $21.4 billion. Non-GAAP EPS was $1.86. The cost of credit rose to $2 billion, up from $0.8 billion last year. Citi has a net build in the allowance for credit losses (“ACL”) for loans. Other provisions are $432 million while unfunded commitments are $241 million.
Citi has a tangible book value of $84.21. This is a massive discount from the current stock price. However, the discount is not a catalyst to buy C stock. The bank traded at a discount to book value for an extended period.
Markets rewarded investors who bought bank stocks before the report. Those who missed the rally should not buy the stock yet. Check if profit-takers will send shares lower.
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