The stock needs about $7.40 of 2026 earnings to sit at $81. I model $8.00 in 2027 after buybacks, which at 11.5 times is $92.
Key points
- $1.87 third-quarter EPS, up 13% year over year on $21.9 billion of revenue.
- $50 billion full-year net interest income guide kept, with about $13 billion expected in the fourth quarter.
- 10.0% CET1, the bottom of the operating range after an AOCI hit from higher rates.
The call
The $81 share price requires about $7.40 of 2026 earnings at eleven times. First-nine-month EPS already totals $5.47, so the market is asking only for a $1.95 fourth quarter and no rerating.
I model $8.00 of 2027 earnings as buybacks cut the share count and net interest income holds near $50 billion. At 11.5 times that is $92, a buy. The market is too pessimistic on capital and deposit mix.
Diluted EPS by quarter ($)Company supplements and 8-K; 2026-10-13. Q4 2026E and 2027E are mine.
Valuation
| Item | Figure |
|---|
| 2026 EPS (mine) | $7.42 |
| 2027 EPS (mine) | $8.00 |
| Multiple | 11.5 times |
| 12-month target | $92 |
| Trailing book | $60 a share |
| Price / book now | 1.35 times |
Large banks trade 11 to 14 times next-year earnings. 11.5 times is in the middle of that band for a 17% return on tangible equity path. Upside is about 14% if 2027 lands; downside is a slower buyback if CET1 stays at 10%.
Risks
- CET1 stuck at 10% if rates stay high, slowing the $2.5 billion quarterly repurchase pace.
- Commercial and industrial charge-offs keep rising from 0.18% annualized.
- Deposit mix shifts further into interest-bearing accounts and compresses the 2.43% net interest margin.
What would change my mind
A cut to the $50 billion net interest income guide or CET1 falling below 10% with buybacks paused.