JPMorgan Chase (JPM) is set to report Q3 results tomorrow before the open with a call to follow at 8:30am ET.

The S&P CapitalIQ consensus is for EPS for $3.00, down 3% yr/yr, while revenue is expected to grow 2% yr/yr to $29.63 bln.

A key metric with banks is their credit reserve activity. When the pandemic started, the banks set aside billions of dollars ahead of what it feared would be a cascade of loan defaults by consumers and small businesses. The concern was overblown and banks are now unwinding credit reserves. This should give a boost to EPS.

In Q2, JPM got a big boost to earnings with its credit reserve release of $3.0 bln, which added $0.75 to EPS. That's a bit smaller than the $5.2 bln, or $1.28 in EPS, release in Q1 and basically in-line with Q4.

Consumer & Community Banking (CCB) will be worth watching as its JPM's second largest segment. CCB revenue rose 3% yr/yr to $12.76 bln. Investors want to see continued growth here in Q3, but the delta variant may have stifled consumer spending on credit cards.

TECHS:

JPM has reported EPS upside in each of the past four quarters, ranging from $0.68-1.56. Despite the big beats, the stock has not gotten the love that you’d expect in recent quarters.

The stock has been trading sideways since late February in the $150-170 rang. The stock is now trading at the upper end of that range into the report.

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