Portfolio: Zacks Focus List

JPMorgan combines industry-leading profitability with a fortress 15% CET1 ratio, giving it unparalleled flexibility to grow and reward. Strong net-interest income and fee diversification underpin resilient earnings even as rates peak.

The company reported strong results in Q2 driven by higher-than-expected net interest income, with guidance of $95 billion NII in FY 2025 despite expectations of compressing net interest margins. Return on tangible common equity (ROTCE) reached 21%, underscoring best in class returns on shareholder capital. Also surprising investors was a lower than expected 2.5% SCB (stress capital buffer, a Federal Reserve stress test) which unlocked a $50 billion buyback and 7.1% dividend hike to $1.50 per share (2.1% yield). Fewer shares magnify EPS growth. Top-tier positions in consumer banking, cards, investment banking and trading; fixed-income and equities revenue jumped 14–15% YoY in 2Q25, cushioning credit normalization. Lastly, office loans, which have become a major problem area, are just ~1% of JP Morgan’s total lending; reserves already cover 34% of Fed stress losses, limiting downside risk.

This is a ‘goldilocks’ scenario for US banks, especially for JPM with durable earnings, outsized capital buffers and aggressive repurchases, making it a compelling long-term compounder.