12:07 PM EDT, 05/20/2025 (MT Newswires) -- JPMorgan Chase ( JPM ) is now expected to report lower second-quarter earnings than previously estimated by Morgan Stanley, after the banking giant issued a downbeat outlook for investment banking fees and the markets division.

JPMorgan ( JPM ) forecasts investment banking fees to be down by a mid-teens percentage figure on an annual basis in the second quarter, Troy Rohrbaugh, co-chief executive of commercial and investment bank, said at its investor day held Monday. The consensus was for an 8% decline, Morgan Stanley said in a client note emailed Tuesday.

"We're in a challenging environment with potential downward pressures on investment banking wallet, acute competition and (an) increasing war for talent," Rohrbaugh said, according to a FactSet transcript. "But we will continue to expand our client franchise through our targeted growth initiatives."

The markets division is seen rising by a mid- to high-single digit in the ongoing quarter, he said. Morgan Stanley put the consensus view at 10% growth.

Morgan Stanley cut JPMorgan's ( JPM ) earnings forecast to $4.72 per share for the current quarter from $4.77, citing lower investment banking fees. The average analyst estimate on FactSet is for GAAP EPS of $4.43 and non-GAAP EPS of $4.46.

The lender continues to expect net interest income, excluding markets, at about $90 billion for 2025, Chief Financial Officer Jeremy Barnum said at the investor day. Barnum acknowledged that the outlook is "probably slightly better" than what was provided when the bank reported its first-quarter results in April.

Morgan Stanley sees "plenty" of growth runway ahead for JPMorgan ( JPM ). The brokerage raised its forecast for JPMorgan's ( JPM ) 2026 EPS to $19.63 from $19.57 amid "slightly higher" consumer and community banking deposit and commercial and investment bank loan growth rates in 2025 and 2026.

Morgan Stanley increased its price target on JPMorgan's ( JPM ) stock to $236 from $235, with an equal-weight rating.

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