U.S. banks are preparing to report their earnings starting Tuesday, with Goldman Sachs, JPMorgan Chase, Citigroup, and Wells Fargo among the first to release results. Analysts expect most large U.S. banks to report year-over-year earnings growth for Q3 2026, despite a decline in capital markets activity compared to the robust conditions of Q2. Huntington Bancorp is the sole bank in the group of 18 expected to show a year-over-year earnings decline.
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JPMorgan Chase is predicted to lead the earnings growth among global systemically important banks (GSIBs) with a 17% increase. State Street and Citizens Financial Group are anticipated to see improvements of 32% in earnings.
While analysts foresee a slowdown in capital markets-related earnings this quarter, some maintain optimism. Jim DeMare from Bank of America noted that Q2 was an exceptional quarter, and Q3 may not replicate that performance. BMO Capital Markets analyst Gerard Cassidy expressed a tempered optimism, suggesting that certain banks might report positively about their Markets & Investment Banking sectors during what is typically a slower quarter.
Conversely, Oppenheimer analyst Chris Kotowski expressed caution regarding the sustainability of capital markets performance, particularly for Goldman Sachs and Morgan Stanley, which are trading at higher earnings multiples.
Recent EPS estimates for Goldman Sachs and Bank of America have been revised downward by analysts, while Morgan Stanley's consensus estimates have also dropped recently. Kotowski has leaned towards favoring traditional commercial banks like U.S. Bancorp and PNC Financial Services for investment opportunities.
Citi analyst Benjamin Gerlinger echoed this sentiment, highlighting banks that focus on commercial lending and have strong capital bases as well-positioned for the current economic climate. Citi recently upgraded Fifth Third Bank to a Buy rating, citing favorable conditions for growth.
Jefferies bank analyst David Chiaverini anticipates that guidance for net interest income will likely show a slight upward bias, attributing growth primarily to increased lending volume rather than improvements in profit margins. Additionally, rising deposit costs and heightened competition are expected to pressure the sector, although ongoing repricing of fixed-rate assets may provide some relief. Jefferies has recommended Bank of America, Citigroup, U.S. Bancorp, Fifth Third, and Citizens Financial Group ahead of the earnings reports.