David Konrad, a KBW equity research analyst, said there were hopes last fall that lower regulations and a surge in animal spirits would unlock both the IPO market and M&A activity in early 2025, according to an April 3 note. Konrad has now lowered Q1 estimates across the board for the majority of globally systemically important banks, or G-SIBS, due to an expected 5% drop quarter over quarter in investment banking. Volatility from Trump’s tariffs have caused IPOs and many mergers to go on hold, Fortune has reported. 

“Although we expect a solid quarter compared to first quarter 2024, volatility in interest rates, sticky inflation and uncertainty surrounding tariffs drove declining equity markets and muted lending and investment banking activity for the quarter,” Konrad wrote. 

Mike Mayo, head of large bank research at Wells Fargo, also lowered first quarter estimates for bank stocks by 4%, according to a March 27 research note. “The key reason is a degree of paralysis from policy uncertainty that makes us more conservative for investment (slow year to date start), loans (no acceleration yet), fixed asset repricing (lower fed rates), and reserves (affected by estimated lower GDP growth),” Mayo wrote. 

Best in Class

JMorgan, along with Wells Fargo and Morgan Stanley, is slated to report their first quarter results Friday. Goldman Sachs, Citi and Bank of America are scheduled for next week. 

Mayo said his top pick remained Citi given the bank’s expected progress from value destruction to value creation. Citi, along with Bank of America, are scheduled to report Q1 results on April 15. 

Mayo expects the New York bank to report $1.90 a share, compared to consensus estimates of $1.84. Mayo said he estimates “9% year-over-year growth in trading largely because volatility and estimated end-user hedging needs remained high through the month of March.” KBW’s Konrad cut Citi’s Q1 EPS to $1.83 from $2.07 a share due to lower banking fees and higher provisions, but raised his price target for Citi to $96 from $92. 

Citi has seen its stock slide about 13% since April 2, when President Trump introduced his “Liberation Day” tariffs. On Thursday, the stock was down about 4% to close at $61.59. 

Mayo expects JPMorgan Chase, the nation’s largest bank, to deliver a Q1 beat. JPMorgan, in the short term, should benefit from volatility given its role as a market facilitator, while in the medium term, the bank should be among those most set to benefit from deregulation, Mayo said in a March 27 note. He boosted JPMorgan Q1 EPS estimate by 12 cents to $4.77 a share, up from consensus estimates of $4.58. KBW’s Konrad decreased his estimate by one cent to $4.65 with a price target that remains at $264.

 “JPM is a best-in-class bank trading at only 60% of the market [price-to-earnings ratio],” Mayo said. 

JPMorgan’s stock has fallen about 7% since April 2. On Thursday, the stock ended at 227.11, down more than 3%.

Capital markets rebound delayed

Both Mayo and Konrad reduced their estimates for Morgan Stanley’s Q1 EPS. Mayo expects MS to report $2.21 a share, down 10 cents from his prior expectations while KBW’s Konrad anticipates $2.20 a share. The consensus estimate for MS is $2.22. Both analysts also reduced their price target for Morgan Stanley, with Mayo at $130 and Konrad at $135. “In our view, continued capital markets recovery is delayed and not dead, with better activity likely later in 2025, and MS likely benefiting from seasonally front-loaded net new assets in wealth in first quarter 2025,” Mayo wrote. Since April 2, shares of Morgan Stanley have fallen roughly 8%. The stock closed Thursday off nearly 5% to $106.58.

Wells Fargo is also on tap to report Friday. KBW’s Konrad boosted his expectations for WFC by one cent to $1.22 a share, in line with Wall Street’s expectations. Konrad also cut his price target to $83 from $86. “The primary risks that could affect our earnings outlook and price target include an unexpected increase in credit costs, reduced loan demand, and margin pressure,” Konrad said in the April 3 note.

WFC’s stock has fallen more than 11% since Trump introduced the tariffs. The shares rebounded late Wednesday but gave back those gains Thursday, with the stock falling nearly 5% to 63.11. 

Goldman Sachs, the storied investment bank, is scheduled to report their Q1 results on Monday, April 14. Mayo lowered his Q1 EPS estimate for Goldman to $12.90 while Konrad cut his expectation to $11.93. (Konrad also lowered his price target for GS to $600 from $660.) Despite lowering his estimates, Mayo said he still thinks a capital markets rebound is delayed and not dead. “However, the policy uncertainties are testing our conviction and making us think that the delay has a chance to be longer than expected with the chance of a “super cycle” more remote,” Mayo said. 

Shares of Goldman have fallen about 11% since Trump introduced the tariffs. On Thursday, the stock closed down more than 5% to $489.80. 

Lastly, Bank of America is slated to report on Tuesday, April 15. Mayo lowered his Q1 EPS estimate by two cents to 78 cents, while Konrad reduced his expectations by a nickel to 84 cents. He cut his price target to $55 from $59 while Mayo remained unchanged at $56. BAC shares have fallen 16% since April 2, and closed Thursday at $34.85, down nearly 4%. 

“Consumers should benefit from improving low-cost deposit pricing (mix likely stabilized) with some headwinds in seasonal card fees,” Mayo wrote in the note.