Goldman Sachs flags JPMorgan EPS miss and Wells Fargo PPNR shortfall

Goldman Sachs has published analysis on recent bank earnings, highlighting specific misses at JPMorgan Chase and Wells Fargo. For JPMorgan Chase, the firm noted a headline earnings per share miss, partially attributed to noise, while core earnings per share remained relatively in line. Core revenue was weaker than expected due to lower fees. A significant factor in the quarter was a sharp reduction in share buybacks, which fell to approximately $1 billion from $6.7 billion in the previous quarter. Common equity tier 1 capital declined by 30 basis points quarter over quarter to 13.9%, a move driven by higher rates, accumulated other comprehensive income, and risk-weighted asset growth. Despite these factors, guidance exceeded consensus expectations, with fiscal year 2026 net interest income projected at $106.2 billion against a $105.5 billion consensus, and 2027 net interest income excluding markets projected at $107 billion, surpassing the $104.5 billion estimate.

Regarding Wells Fargo, Goldman Sachs reported a roughly 3% pre-provision net revenue miss. Both trading fees and net interest income fell below expectations. While deposit costs were contained, the bank cut its repurchase program to $2.5 billion, down from the prior quarter's $3.0 billion. Capital levels stood at 10.0%, marking a 30 basis point drop from the previous period, with accumulated other comprehensive income weighing on the figure. The bank reiterated its full-year net interest income guidance.