Analysts at Wolfe Research have downgraded shares of JPMorgan Chase and Bank of America, citing limited upside at current valuation levels. The downgrades come as investors anticipate the start of earnings season next week, when the largest US banks will report their quarterly results. According to analyst Steven Chubak, the 2025 rally has boosted valuations across the sector, prompting a more cautious outlook.
Chubak noted that while JPMorgan warrants a premium valuation compared to its peers due to its strong franchise, there is limited potential for further re-rating. He also suggested that JPMorgan’s earnings growth may lag behind its competitors. JPMorgan shares experienced a 2 per cent decline on Wednesday, following a record high close in the previous session. JPMorgan Chase is a leading global financial services firm with assets of trillions of dollars, while serving millions of customers worldwide. The firm is a leader in investment banking, financial services, asset & wealth management services.
Bank of America was also downgraded by Wolfe Research, with Chubak stating that the bank’s net interest income upside is already reflected in its current share price. He added that the bank’s expense guidance could potentially disappoint, as estimates for 2026 expenses appear too low. Bank of America shares also fell on Wednesday, following a recent record high close on Tuesday. Bank of America is one of the world’s leading financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investment, asset management and other financial and risk management products and services.
In addition to JPMorgan and Bank of America, Wolfe Research also downgraded shares of US Bancorp and M&T Bank Corp to peer perform from outperform. Conversely, Wells Fargo and Morgan Stanley were highlighted as top stock picks among large-cap lenders. The major banks are scheduled to release their quarterly earnings next week, with JPMorgan and Bank of New York Mellon Corp kicking off the season on Tuesday, followed by other major financial institutions later in the week.
