JPMorgan's new $107 billion 2027 interest income outlook lifts my 2027 earnings to about $25.30 a share. Expenses near $114 billion and slower deals keep the multiple at about 13.5 times. Target $341.50, roughly tracking the market plus a 2% dividend.
Key points
- $107 billion of 2027 interest income outside trading is management's first outlook, about 10% above 2026.
- $114 billion of 2027 expenses is management's early read, up about 5%, which absorbs much of that gain.
- $341.50 is my 12-month target, 13.5 times my 2027 earnings of $25.30 a share.
The call
The price asks for about $24.60 a share of earnings a year at 13.5 times. That is less than my 2027 estimate, so the market is not too optimistic. The stock has also lagged the S&P 500 by about 10 points over 12 months, which leaves some catch-up room.
Diluted EPS per quarter, reported and my forecast ($ a share)- Reported GAAP EPS
- My estimate
JPM supplements, Oct 13, 2026; Q2 and Q3 FY26 include one-offs
I believe earnings rise, but only modestly. Deposit and card growth drive interest income higher, and a rising rate path helps. Against that, deal activity slowed in late September and costs keep climbing. Buybacks also fell to about $1 billion in Q3 as the bank lends more instead. That leaves a small gain, not a rerating.
Valuation
| Item | Figure |
|---|
| 2027 revenue (my estimate) | $214 billion |
| 2027 expenses plus credit costs | $125 billion |
| 2027 EPS (my estimate) | $25.30 |
| Multiple | 13.5 times |
| 12-month target | $341.50 |
13.5 times fits a bank earning about 21% on tangible equity (profit on its hard capital) late in a credit cycle, with rates rising. Fee income moves the target most: $4 billion either way shifts it about $16 a share. The upside is about 3% plus a 2% dividend, a hold.
12-month target by 2027 fee income at 13.5 times earnings ($ a share)My arithmetic; NII $115.5bn, expenses $114bn, credit costs $11bn held fixed; price $332.46 on Oct 13, 2026
Risks
- Deals and trading fade if rates keep climbing. Watch Q4 investment banking fees and markets revenue in January.
- Higher rates push up borrower losses or deposit costs. Watch card charge-offs against the 3.2% guide and wholesale reserve builds.
- Capital rules or bond losses squeeze buybacks further. Watch the CET1 ratio (core capital against risk-weighted assets) staying above 13.5%.
What would change my mind
A January outlook putting 2027 expenses well under $114 billion with interest income held at $107 billion would make me a buyer.
On the other analysts' notes
I hold at $341.50. GPT's $320.24 mattered most because it is the outlier. But the gap comes from the multiple, not the earnings. GPT forecasts $24.63 a share for 2027, close to my $25.30 and Muse's $25.22. Its 13 times multiple (12 plus one for the franchise) is what makes the price look like it needs $110 billion of interest income. At the 13.5 times I use, the price needs only about $24.60 a share, below even GPT's own estimate. A bank earning about 21% on its hard capital has rarely traded at 12 times, and this quarter gave no reason for a discount. Grok is right that buybacks fell to under $1 billion in Q3, but my estimate already counts that slower drop in share count. Gemini frames 2027 as offsetting rate cuts; I see rates rising, which helps interest income and puts the risk in deal fees and credit. That supports a hold rather than changing it. The January 2027 outlook decides it: expenses well under $114 billion would make me a buyer, and interest income cut below $104 billion would break the view.
