Jim Cramer shares his take on banking stocks
Speakers
Jim Cramer
— Host, Mad Money
Summary
Jim Cramer reviewed the latest quarterly results from the largest U.S. banks after the group sold off despite generally strong numbers. He attributed the decline to high expectations, cautious management commentary and the political attack on credit-card debt, and said the group is due for a near-term breather. Cramer said big banks can keep working this year if the economy holds up, with Citigroup as his top pick and Bank of America second, while he sold some Wells Fargo and thinks JPMorgan will be fine.
- JPMorgan reported a solid quarter but fell on cautious Dimon commentary and weak investment banking.
- Wells Fargo missed estimates, prompting Cramer to sell some shares and expect more near-term downside.
- Bank of America beat across business lines; Cramer called the selloff extreme and guilt by association.
- Citigroup delivered a no-drama quarter and remains much cheaper than peers; Cramer would buy it first.
- Cramer expects bank stocks to stay volatile for a week to ten days before rallying if the credit-card rate-cap threat recedes.
- He said big banks can keep working this year as long as the economy does not deteriorate.
Ideas
JPMorgan will be fine after breather.
JPMorgan's quarter was solid excluding the Apple-card reserve, with 7% net interest income growth and strong trading, but investment banking was weak and Jamie Dimon's geopolitical/deficit warnings helped trigger the selloff. Cramer thinks the stock will be fine because a 35% 12-month rally had left it due for a breather.
Wells Fargo still has near-term downside.
Wells Fargo missed top and bottom lines, net interest income was light, and its efficiency-ratio improvement was not enough for spoiled analysts, though the business is doing better under the post-asset-cap regime. Cramer sold some shares, still believes longer term but expects the stock's decline to continue near term after its 35% run.
Bank of America selloff is overdone.
Bank of America reported a solid quarter with beats across all four business lines, 7% revenue growth, 18% EPS growth, 10% net interest income growth and a 5-7% 2026 NII growth guide; the stock's 4% decline was extreme guilt by association. Cramer ranks it second among the banks he discussed.
Citigroup is too cheap to ignore.
Citigroup delivered another solid, no-drama quarter under Jane Fraser, with 8% revenue growth, 35% EPS growth and the best net interest income growth of the banks; despite mixed personal banking and wealth, it remains much cheaper than peers even after a 66% run. Cramer says it is too cheap to ignore and is the first bank he would buy.
Big banks can keep working this year.
The big national banks reported generally strong results, but high expectations, cautious commentary and the political attack on credit-card debt have triggered a pullback after major runs. Cramer thinks they can keep working this year if the economy does not deteriorate; he expects near-term pain of a week to ten days, then a rally once the credit-card rate-cap issue moves to the sidelines.
