Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Here are the key points:
Estimates for the Energy sector notably moved higher in March, but estimates have also increased for 7 other sectors, including Tech, Finance, Construction, Basic Materials, and Transportation.
Companies with fiscal quarters ending in February have been reporting quarterly results that get counted as part of the March-quarter tally. To date, we have seen such February-quarter results from 19 S&P 500 members. Total earnings for these 19 index members are up +79.7% from the same period last year on +15.6% higher revenues, with 73.7% beating EPS estimates and 84.2% beating revenue estimates.
JPMorgan JPM, Citigroup C, and Wells Fargo WFC kick off the March-quarter reporting cycle for the Finance sector on April 14th. Bank stocks, in general, and these three stocks in particular, have enjoyed a strong rebound following the Iran war ceasefire announcement, which has raised hopes that threats to the economy from high oil prices will be resolved. Banks are cyclical businesses, so any real or perceived reduction in economic risks is positive for their outlook.
The chart below shows the performance of JPMorgan, Citigroup, and Wells Fargo shares relative to the S&P 500 since the start of the Iran conflict.
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Image Source: Zacks Investment Research
The revisions trend is mixed for these three banks, with Q1 estimates for Citigroup and JPMorgan modestly down in recent weeks, while the same for Wells Fargo are a tad higher.
JPMorgan is expected to earn $5.41 per share on $48.2 billion in revenues, representing year-over-year changes of +6.7% and +6.4%, respectively. Citigroup and Wells Fargo are benefiting from easy comparisons, helping their expected Q1 earnings to show growth rates of +34.2% and +23.6%, respectively.
Total Q1 earnings for the Zacks Investment Banks/Managers industry, of which JPMorgan, Citigroup, and Wells Fargo are a part, are expected to increase by +6.1% from the same period last year on +9.8% higher revenues, as the table below shows.
Zacks Investment Research
Image Source: Zacks Investment Research
In terms of these banks’ business mix, most of the growth will be coming from the core banking franchises, with investment banking activities largely stable. On the core banking side, loan growth is expected to show noticeable improvement in Q1, accelerating the trend that started in 2025. Individual loan portfolios at these banks will grow at different rates, but they will show the growth pace accelerating from what we saw in the preceding period.
Aggregate Fed data shows loan balances increasing by +7% in Q1 for the entire banking industry. For context, loan growth has been trending below historical averages over the past three years, but the pace has started to improve in 2025 and appears on track to return to historical growth rates this year. The favorable outlook for loan portfolios bodes well for net interest income in Q1 and beyond, even though the yield curve has lost some of its steepness in recent weeks.
On the investment banking front, we should get solid numbers from the capital markets side of the business, particularly on the equity capital markets front. But M&A activities have been underwhelming, reflecting the effects of geopolitical uncertainties. Trading revenues remained robust in Q1, with mid-quarter updates in February indicating growth rates in the +10% to +15% range.
Aggregate trends on the credit quality front have been benign, as reflected in household and commercial delinquencies, bankruptcies, debt-service, and other metrics. But the market’s focus will be private-credit exposure for banks, as the space has been in the spotlight lately for its exposure to the software and data-center industries.
For the Finance sector as a whole, Q1 earnings are expected to increase by +19.6% on +9% higher revenues, which will follow the sector’s +17.3% earnings growth on +7.4% higher revenues in the preceding period. The chart below shows the earnings and revenue growth picture for the Zacks Finance sector on a quarterly basis.
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Image Source: Zacks Investment Research
The chart below shows the sector’s earnings growth picture on an annual basis.
Zacks Investment Research
Image Source: Zacks Investment Research
The Finance sector is the second largest earnings contributor to the S&P 500 index, behind only the Tech sector, accounting for 17.3% of the index’s expected forward 12-month earnings.
The chart below shows S&P 500 expectations for 2026 Q1 in terms of what was achieved in the preceding four periods and what is currently expected for the following three quarters.
Zacks Investment Research
Image Source: Zacks Investment Research
The chart below shows the overall earnings picture for the S&P 500 index on an annual basis.
Zacks Investment Research
Image Source: Zacks Investment Research
An interesting development on the revisions front has been the evolution of full-year 2026 estimates since the start of the Iran war. No surprises in the trend reversal in Energy sector estimates since the start of March, but estimates for 8 other sectors have also moved higher in that time period. The Tech sector’s positive revisions trend has continued in this period, while the revisions trends for the Basic Materials and Consumer Staples sectors shifted from negative to positive since the start of March.
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