Q3 NII rose 8% and 2027 is guided the same way. A $1.2 billion settlement hit GAAP EPS. I still model $5.10 of next-year earnings and 12 times, a $61.20 stock.
Key points
- $5.10 is my next-four-quarters EPS, versus $4.21 trailing GAAP after the charge.
- 12 times that earnings still gives a $61.20 target, 19% above $51.29.
- 8% or more 2027 NII growth was added today on top of about 8% for 2026.
The call
The $51.29 price needs only $4.27 of next-year earnings at 12 times, or it needs the multiple near 10 times my $5.10. That is too pessimistic for a bank growing loans 6% and guiding NII up 8% again in 2027.
I still model $5.10 because assets keep repricing, loans grow, and the $1.2 billion settlement is one-time. Markets fees were lumpy, not a floor. CET1 at 10.9% still funds buybacks.
Diluted EPS by quarter, GAAP vs my forecastCompany filings through Q3 2026; my Q4 2026–Q3 2027 estimates. Settlement charge in Q3 2026 GAAP.
Valuation
| Item | Figure |
|---|
| Next-four-quarters EPS (mine) | $5.10 |
| Multiple | 12.0 times |
| 12-month target | $61.20 |
| Trailing GAAP EPS | $4.21 |
| Price / trailing earnings | 12.2 times |
| Price / tangible book | about 1.5 times |
Twelve times is a mid-cycle bank multiple for 8% NII growth and mid-teens return on tangible common equity. If earnings land, the stock can re-rate. If fees stay weak, 10 times already discounts a lot. Upside is 19% versus a mid-teens drop if NII stalls.
Risks
- Investment-banking and FICC fees stay weak for more than one quarter.
- Net interest income misses the 8% 2026 path or the 2027 8%+ guide.
- CET1 stays at 10.9% and buybacks slow, or charge-offs rise from 0.44%.
What would change my mind
A Q4 NII print that implies 2026 growth below 6%, or CET1 falling through 10.5%.
Net interest income FTE ($ billions)- Reported NII FTE
- My NII FTE
Company supplemental through Q3 2026; 8% 2026 and 2027 growth as guided Oct 14.