Can Big Banks’ ‘Cheap’ Stocks Keep Rising? We’ll Find Out When JPMorgan and an Unusual Number of Others Report Earnings Tuesday

 Can Big Banks’ ‘Cheap’ Stocks Keep Rising? We’ll Find Out When JPMorgan and an Unusual Number of Others Report Earnings Tuesday

## Five of the 'Big Six' banks report on the same day—a rare Super Tuesday for Wall Street. With the KBW Bank Index already beating the S&P 500, the question isn't just whether earnings will beat, but whether the stocks have already priced in the good news.

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### Introduction: A Super Tuesday for Wall Street

Every quarter, the largest U.S. banks kick off earnings season with JPMorgan Chase reporting on the first day, typically along with one or two others. But on Tuesday, July 14, 2026, we're in for something unusual.

Five of the "Big Six" banks—JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, and Goldman Sachs—will all announce their second-quarter results before the market opens. (Morgan Stanley, the sixth, reports on Wednesday.)

This rare alignment creates a unique moment for investors. For the first time in recent memory, nearly all of the nation's largest financial institutions are laying their cards on the table simultaneously, offering an unusually clear picture of the health of the American banking system.

And the stakes couldn't be higher. Bank stocks have been on a remarkable run. The KBW Nasdaq Bank Index of 24 large U.S. banks has returned 14.7% so far in 2026, surging lately to outperform the S&P 500, which has returned 10.8%.

But here's the question that's haunting investors: **Can big banks' "cheap" stocks keep rising?**

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### The Valuation Question: How Cheap Are They, Really?

Bank stocks have historically traded at a significant discount to the broad U.S. stock market. The Invesco KBW Bank ETF, which tracks the KBW Bank Index, has a forward price-to-earnings ratio of 12.4. That's just 61% of the forward P/E of the S&P 500, which stands at 20.4.

To put that in perspective: the KBW Bank ETF has traded at an average of 67% of the S&P 500's valuation since 2011. The banks have come up quite a bit over the past three years—they traded as low as 39% of the S&P 500 in May 2023—but their collective valuation may still be considered a bit low.

**Bank of America** screens as the cheapest among the major banks, trading at about 13 times forward earnings with a $66 analyst target. At $59.67, it appears to offer the most attractive valuation.

**JPMorgan Chase**, on the other hand, looks more fully valued. At $336.47, near its 52-week high of $341.91, the stock has a forward P/E of 15 and trailing P/E of 16. With 12 analyst Hold ratings and a consensus target of $352.76, the upside is modest.

**Morgan Stanley** has surged 59% and now trades above its own analyst consensus. At $222.28, it appears stretched on valuation.

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### What to Watch at Each Bank

#### JPMorgan Chase: The Bellwether

As the largest U.S. bank, JPMorgan sets the tone for the entire sector. Analysts expect the bank to report revenue of $51.09 billion, up roughly 12% from a year ago, with earnings per share anticipated to increase about 7% year-over-year to $5.59.

The bull case is clean: JPMorgan compounds book value while returning $12.2 billion in quarterly capital. Markets revenue hit a record $11.60 billion, and investment banking fees rose 28% as advisory activity re-accelerated. The bank is earning a 16.5% return on equity, and the multiple is reasonable.

The bear case: the stock has already done the work. Shares are up nearly 19% over one year and sit near their 52-week high. Ratings skew cautious, with 12 Holds, 8 Buys, and just 4 Strong Buys. At current levels, risk-reward looks symmetric.

#### Bank of America: The Value Play

Bank of America is projected to generate revenue of $30.65 billion, a 16% increase from the year-ago quarter. Earnings per share are expected to be $1.12, up 26% from a year earlier, with some analysts estimating $1.13—a 27% rise.

The bank's net interest income is expected to benefit from the Federal Reserve's pause on rate cuts and the possibility of a hike later this year. Loan growth is expected to be the strongest in nearly three years. The Zacks Consensus Estimate for tax-equivalent NII is $16.24 billion, indicating a 9.6% increase from the year-ago quarter.

Investment banking fees are also expected to be strong, driven by robust IPO activity—including SpaceX's blockbuster offering—and solid bond issuance volume.

#### Citigroup: The Turnaround Story

Citigroup is expected to deliver the strongest profit growth among the five banks, with earnings per share forecast to rise 39% year-over-year to $2.72. Revenue is expected to grow about 9% to $23.74 billion.

"Citigroup's efficiency improvement is the standout story this quarter," said David Chiaverini, an analyst at Jefferies. The bank's efficiency ratio is expected to improve to 60% from 62.7% a year earlier.

Book value per share is seen rising to $115.15 from $106.94. Equity markets revenue is expected to reach $1.72 billion, up 6.5% year over year.

Citigroup tops earnings estimates 81% of the time, according to Bespoke Investment Group data. The bank's ability to narrow the gap to its own efficiency target will be a key metric for shareholders watching the turnaround story.

#### Goldman Sachs: The Dealmaking Barometer

Goldman Sachs is the most direct bet on a dealmaking rebound. With little consumer lending, its fortunes rise and fall with investment banking and trading.

Analysts expect Goldman to report earnings per share of $14.47 to $14.51, up more than 30% year-over-year, on revenue of about $16.4 billion, an increase of roughly 13%.

The bank entered earnings season after advising on more than $1 trillion of announced mergers and acquisitions during the first half of 2026. Trading results, merger advisory, equity underwriting, and the investment banking backlog will dominate the report.

#### Wells Fargo: The Comeback Story

Wells Fargo faces a question investors have asked for years: Can the bank finally grow again?

That question exists because of a penalty that shaped the last seven years. In 2018, following its fake-accounts scandal, the Federal Reserve capped Wells Fargo's assets at $1.95 trillion. The Fed lifted that cap in June 2025. For the first time since 2018, the balance sheet can grow with the business.

The line to watch isn't earnings per share. It's net interest income—the gap between what the bank earns on its loans and pays on deposits. Management is guiding for about $50 billion in net interest income this year.

Wells Fargo repurchased $17.7 billion of its own stock in 2025. Despite having the cheapest valuation among the major banks and a Moderate Buy consensus rating, analysts see the biggest price upside in Wells Fargo.

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### The Bigger Picture: What's Driving Bank Earnings

#### The SpaceX IPO Effect

The second quarter saw a blockbuster mega offering from SpaceX, which generated substantial underwriting and debt financing fees for the banks. Goldman Sachs and Morgan Stanley, in particular, benefited from the IPO.

#### Geopolitical Volatility

The ongoing Iran conflict has created market volatility, which has been a boon for trading desks. Higher trading volumes have boosted revenue across the industry.

#### The "Higher-for-Longer" Rate Environment

With the Federal Reserve holding rates higher for longer, net interest income—the spread between what banks earn on loans and pay on deposits—is the swing factor for the biggest lenders.

Ebrahim Poonawala, head of research for North American banks at BofA Securities, told MarketWatch that good loan-growth numbers and the "higher-for-longer" interest-rate environment would bode well for banks' net interest margins.

But there's a headwind: deposit pricing competition is intense. Banks are paying more to keep deposits, which compresses margins.

#### Strong Consumer and Corporate Demand

Loan growth is expected to be the strongest in nearly three years. Demand for commercial and industrial loans, and consumer credit remained resilient in the second quarter. Strategic buyers remained active, pursuing transactions aimed at enhancing scale and strengthening resilience.

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### The Human Element: What This Means for Investors

#### For Current Shareholders

If you own bank stocks, Tuesday's reports will test whether the sector's momentum can justify equity valuations near all-time highs. The finance sector is expected to deliver 12.6% profit growth on 8.4% revenue gains, with aggregate earnings at record levels.

But as JPMorgan's experience shows, a stock can do everything right and still not move higher if the good news is already priced in.

#### For Prospective Buyers

Bank of America screens as the cheapest at 13x forward earnings. Wells Fargo offers the biggest upside according to analysts. But both come with risks: BAC faces rate uncertainty and geopolitical headwinds, while WFC is still proving it can grow without the asset cap.

#### For Everyone

This earnings season is a reminder that bank stocks are a window into the broader economy. When banks are lending, consumers are spending, and dealmakers are busy, it's a sign of economic health. When loan growth slows and provisions rise, it's a warning sign.

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### Frequently Asked Questions

**Q: Why are five banks reporting on the same day?**

A: It's a rare alignment of earnings schedules. In recent years, four banks have typically kicked off earnings season on the same day, but five on Tuesday is unusual.

**Q: Which bank is expected to show the strongest profit growth?**

A: Citigroup is expected to post the strongest year-over-year profit growth at 39%.

**Q: Which bank is the cheapest on valuation?**

A: Bank of America screens as the cheapest at about 13 times forward earnings. Wells Fargo also has one of the lowest forward P/E ratios among the largest U.S. banks.

**Q: Which bank offers the most upside?**

A: Analysts currently see the biggest stock upside in Wells Fargo.

**Q: What is the biggest risk to bank earnings?**

A: Intense competition for deposits is a headwind. Banks are paying more to keep deposits, which compresses net interest margins.

**Q: How did the SpaceX IPO affect bank earnings?**

A: The SpaceX IPO generated substantial underwriting and debt financing fees for the banks, particularly Goldman Sachs and Morgan Stanley.

**Q: What does the "higher-for-longer" rate environment mean for banks?**

A: Higher rates for a longer period typically benefit banks' net interest margins—the spread between what they earn on loans and pay on deposits.

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### Conclusion: A Test of Momentum

Tuesday's Super Tuesday of bank earnings is more than just a quarterly ritual. It's a test of whether the banking sector's momentum can continue.

The numbers look good on paper. Analysts expect S&P 500 companies to post 23.8% earnings growth, with the finance sector delivering 12.6% profit growth on 8.4% revenue gains. Citigroup is expected to post 39% EPS growth, Goldman Sachs more than 30%, and Bank of America 27%.

But the question isn't whether earnings will beat—it's whether the stocks have already priced in the good news.

JPMorgan sits near its 52-week high with modest upside. Morgan Stanley has surged 59% and now trades above its own analyst consensus. Bank of America screens as the cheapest but faces rate uncertainty.

The banks as a group still trade at a significant discount to the S&P 500—12.4 times forward earnings versus 20.4. But that discount has narrowed considerably from the pandemic era, when they traded as low as 39% of the S&P 500's valuation.

For investors, the message is clear: bank stocks have had a good run, but the easy money may have been made. The next leg higher will depend on whether earnings growth can continue to outpace expectations—and whether the "cheap" stocks can prove they're still cheap.

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### Disclaimer

**IMPORTANT:** This article is for informational and educational purposes only and does not constitute financial, investment, or trading advice. The information contained herein is based on publicly available sources and reflects the author's understanding as of the publication date. Earnings estimates, stock prices, and market conditions are subject to rapid change. Past performance is not indicative of future results. You should consult with a qualified financial advisor before making any investment decisions.

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*Published: July 13, 2026*

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**Tags:** bank earnings, JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, Morgan Stanley, Q2 2026 earnings, bank stocks, KBW Bank Index, net interest income, investment banking, trading revenue, SpaceX IPO, Federal Reserve, interest rates, bank valuation, financial sector, earnings season, stock market analysis