US banks could deliver broad earnings beats as strong capital markets activity, resilient economic conditions and improving wealth management flows support second-half 2026 and fiscal 2027 earnings revisions, Bank of America analysts wrote in a note ahead of the sector’s upcoming earnings reports.
The firm wrote that it expects all eight major banks it covers, including JPMorgan Chase & Co (NYSE:JPM, XETRA:CMC), Citigroup Inc (NYSE:C), Wells Fargo & Co (NYSE:WFC, XETRA:NWT), Goldman Sachs Group Inc (NYSE:GS, XETRA:GOS), Morgan Stanley (NYSE:MS), Bank of New York Mellon Corp (NYSE:BK, XETRA:BN9), State Street Corp (NYSE:STT) and Northern Trust Corp (NASDAQ:NTRS), to exceed both Bank of America and consensus earnings-per-share estimates.
It added that potential upside in net interest income, particularly at JPMorgan and Citigroup, along with stronger wealth management flows at Morgan Stanley (NYSE:MS) and Northern Trust, could support positive investor reactions.
The firm noted that while investors often look past trading and investment banking revenue beats because they are not always incorporated into long-term estimates, stronger underlying revenue trends could lead to broader earnings revisions.
JPMorgan Chase is among the stocks Bank of America views as having the most asymmetric risk-reward setup heading into results. The firm wrote that investors remain focused on management’s cautious commentary around current earnings levels, with executives previously warning that the bank may be “over-earning” in the near term. However, Bank of America expects stronger capital markets revenue to support second-quarter earnings, raising its EPS estimate to $5.59 from $5.48.
Citigroup could also see continued momentum, with Bank of America writing that the company’s conservative guidance contrasts with a strong operating environment. The firm expects stronger capital markets revenue to lift its second-quarter EPS estimate to $2.65 from $2.60, while noting that investors will be watching progress toward return on tangible common equity targets.
For Wells Fargo, Bank of America wrote that investor focus will remain on net interest income growth and whether the bank can achieve its targeted returns while executing its broader growth strategy. The firm maintained its second-quarter EPS estimate of $1.72, noting that confidence around Wells Fargo’s ability to deliver on its net interest income outlook could be key for the stock’s performance following results.
Morgan Stanley enters earnings with positive momentum tied to its wealth management business, trading operations and international franchise, according to Bank of America. The firm wrote that investors will be watching net new asset growth in wealth management, particularly following recent initial public offerings and continued integration benefits from its workplace business. Bank of America raised its second-quarter EPS estimate for Morgan Stanley to $2.81 from $2.71 due to stronger capital markets revenue expectations.
Goldman Sachs is expected to report strong revenue trends, though Bank of America wrote that investors will be looking for evidence that earnings growth and return on equity remain sustainable following the stock’s recent outperformance. The firm raised its second-quarter EPS estimate to $14.11 from $13.18 on stronger capital markets revenue expectations.
Bank of America wrote that Goldman Sachs’ capital management, efficiency initiatives and ability to sustain returns through market cycles will remain key areas of investor attention. The firm added that while stronger trading and investment banking activity could drive an earnings beat, investors may place greater emphasis on the durability of future earnings growth and the bank’s premium valuation.