JPMorgan raised the bar for the financial sector with its first-quarter earnings report.On April 13, the bank reported first-quarter net income of $6.4 billion, or $1.65 a share.
Additionally, it was a record-setting quarter for the firm's investment banking business. Markets and investor services revenue, at $6.5 billion, were up 13% year-on-year, with the fixed income, currencies, and commodities business enjoying a strong start to the year.
According to a group of equity analysts led by Susan Roth Katzke at Credit Suisse, JMorgan's performance exceeded expectations.
The Credit Suisse team said JPMorgan was "setting a high bar for the bank group," pointing out that the reported EPS of $1.65 per share was above Credit Suisse's estimate of $1.45 per share and a Wall Street consensus of $1.52 per share.
"Upside was largely revenue-driven; efficiency ratio and aggregate credit costs were in line," the bank said.
In light of JPMorgan's solid performance, Credit Suisse has increased its earnings per share estimates for the second quarter to $1.58 and for the third quarter to $1.75. Credit Suisse kept its price target for JPMorgan at $99 per share, above the firm's current market price of $84.99.
Credit Suisse expects the firm to fare well in the current market environment relative to its peers. The bank said:
"JPMorgan remains positioned to make the most of the current environment, and any upside. In terms of forward guidance… market-related activity remains healthy with a solid investment banking pipeline; full year NII guide is now +$4.5bn reflecting the March rate hike and the implied forward curve (already factored in to our estimates), adjusted expense ($58bn) and net charge-off (~$5bn) guides are unchanged."
