JPMorgan Raises 2026 NII Outlook: What Does It Mean for Earnings?

JPM lifts its 2026 NII outlook to $105.5B as loan and deposit growth offset rate pressures, though higher expenses may temper profit gains.

Swayta Shah

2 min read

JPMorgan JPM raised its 2026 net interest income (NII) outlook after a strong second quarter, signaling that balance sheet growth is helping offset what was previously expected to be a more pronounced rate-driven headwind. The update comes at a time when the Federal Reserve has paused its easing cycle and adopted a more hawkish tone, citing persistent inflation pressures.

The bank now expects NII of about $105.5 billion, up from the previously targeted $103 billion. NII excluding Markets is projected at approximately $96.5 billion compared with the earlier estimate of $95 billion. The upward revision is notable because it suggests JPMorgan is less exposed to near-term rate uncertainty than initially assumed.

The macro backdrop is important here. With the Fed signaling that rates may stay higher for longer or even move higher if inflation re-accelerates, banks face a more complex environment. While higher rates can support asset yields, they also risk slowing loan demand and increasing deposit competition. JPMorgan’s guidance implies that strong loan growth and resilient deposit inflows are currently outweighing those pressures.

In the second quarter, average loans rose 10% year over year and deposits increased 7%, helping stabilize NII even as earlier expectations assumed rate cuts would weigh on earnings. Growth in card revolving balances and wholesale lending also provided support. However, the higher NII outlook will not fully translate into profit expansion. JPM also raised its 2026 adjusted expense forecast to about $107.5 billion, reflecting higher activity-driven costs.

The revised outlook highlights JPMorgan’s ability to generate earnings resilience in a “higher-for-longer” rate environment. Still, the key variables for investors remain the Fed’s inflation response, deposit pricing dynamics, and whether loan growth can continue if financial conditions tighten further.

How are JPMorgan’s Peers Faring in Terms of NII?

Two peers of JPMorgan are Citigroup C and Bank of America BAC.

Citigroup’s NII recorded a three-year CAGR of 6.2% through 2025, with the uptrend continuing in the first half of 2026. The company continues to witness solid growth in loan and deposit balances. Citigroup expects NII, excluding Markets, to increase 5-6% in 2026, supported by loan growth and stabilizing funding dynamics.

Bank of America is well-positioned to deliver continued growth in NII. Over 2020–2025, NII witnessed a CAGR of 6.7%, with the momentum extending into the first half of 2026. Bank of America expects 2026 NII (FTE) to grow at the upper end of the 6-8% range, reflecting confidence in the durability of this revenue stream.

JPMorgan’s Price Performance, Valuation and Estimates

JPM’s shares have gained 10.9% so far this year.

Image Source: Zacks Investment Research

From a valuation standpoint, JPMorgan trades at a 12-month trailing price-to-tangible book (P/TB) of 3.33X, above the industry average.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for JPMorgan's 2026 earnings suggests a 22.6% rise on a year-over-year basis, while 2027 earnings are expected to grow at a rate of 0.3%. In the past month, earnings estimates for 2026 and 2027 have moved upward to $24.93 and $25.02, respectively.

Image Source: Zacks Investment Research

JPMorgan currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

7 Best Stocks for the Next 30 Days

Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."

Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention.

See them now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report