Big Bank Earnings or… Stocks on Sale? 🤔

It’s that time of the year once again… bank earnings season! 🎁 BlackRock and JPMorgan posted their Q1 2022 financial results today. BlackRock beat analyst estimates and demonstrated a generally strong response to tightening economic conditions; JPMorgan posted mixed figures and commented on its outlook for the U.S. economy in 2022. 

Overall, BlackRock exceeded analysts’ expectations in the first quarter, demonstrating the asset manager’s ability to perform in spite of global economic pressures. BlackRock CEO Larry Fink commented on the firm’s performance during an otherwise tough Q1: 

“BlackRock is well-positioned to continue generating durable, differentiated organic growth and delivering value for all of our stakeholders… As the world continues to face geopolitical and economic uncertainty, our investments over the years to build BlackRock’s all-weather platform position us well to advise our clients and help them pursue their long-term financial goals.” 

$BLK | EPS: $9.52 (vs. $9.41 expected) | Revenue: $4.7 billion (vs. $4.89 billion) | Link to Report

America’s largest bank didn’t fare as well as BlackRock in the first quarter, however ($JPM lost 3.2% today.) JPMorgan’s profits have fallen 42% since Q1 2021: investment banking declined 31%, equity underwriting dropped 76%, trading stumbled 3%, asset management plummeted 20%, and commercial banking fell 28%. JPMorgan even lost $524 million in the markets thanks to the Ukraine-Russia war. 

$JPM | EPS: $2.63 (vs. $2.67 expected) | Revenue: $31.6 billion (vs. $30.86 billion) | Link to Report

Nonetheless, JPMorgan CEO Jamie Dimon isn’t entirely convinced that a recession is coming. Dimon expressed his relative optimism: “A recession is far from a sure thing. Is it possible? Absolutely.” Dimon also elaborated in the Wall Street Journal about “powerful forces” hindering the U.S. economy.