News of the Week (October 13-17, 2025)

Sections 3-14 are for paid subscribers. These sections include commentary on First Brands and Tricolor implications, as well as updates on PayPal, Uber, Flutter, Robinhood, SoFi, Amazon etc.

Welcome back to earnings season. Our Taiwan Semi earnings review was published during the week. Next week’s content schedule includes Tesla and Netflix reviews, as well as IBM and Intel coverage. My current portfolio & performance vs. the S&P 500 can be found here.

1. Credit Earnings – JP Morgan, Bank of America & American Express

Important Credit Lingo:

Delinquencies are loans that are past due by a number of days. Delinquency rates are the leading indicator for credit health.
Net charge-offs are loans that a creditor decides won’t be repaid and will instead become losses. Net charge-off (NCO) rate is the percentage of loans classified as uncollectible. This is a lagging credit indicator compared to the leading delinquency indicator.
Reserve levels refer to the amount of funds set aside to cover potential losses for the overall portfolio. Reserves and provisions (which are also for covering potential losses for specific types of credit) are tightly positively correlated.
- Higher expected delinquencies and NCOs contribute to reserve building.
As reserves and provisions build, allowance for credit losses grows. This is the overall balance of funds to cover losses.

a. JP Morgan

Results:

JPM beat revenue estimates by 1.5%. Missed 2.48% net interest margin (NIM) estimates by 3 basis points (bps; 1 basis point = 0.01%). It also beat $4.81 GAAP EPS estimate by $0.26 or 5.4%.

“While there have been signs of softening, particularly in jobs, the economy generally remained resilient. However, there continues to be a heightened degree of uncertainty.” – Jamie Dimon

Credit:

“While we are closely watching the potentially softening labor market, our credit metrics, including early stage delinquencies, remain stable and slightly better than expected.” – CEO Jamie Dimon

“Wholesale charge-offs were slightly elevated as a result of a couple of instances of apparent fraud in certain secured lending facilities. Otherwise, in both wholesale and consumer, credit performance remains in line with our expectations.” – CEO Jamie Dimon

The current facts on the consumer side are that the consumer is resilient, spending is strong, and delinquency rates are actually coming in below expectations… we now expect the 2025 card net charge-off rate to be approximately 3.3% because of favorable delinquency trends driven by the continued resilience of the consumer.” – CFO Jeremy Barnum

“As we sit here right now and we sort of update the macro environment, a few things are true. One is that the personal savings rate is a little bit lower than expected. Consumer spending remained robust while income was a bit lower. That's all else equal decreasing balances per account in CCB.” – CFO Jeremy Barnum

“From the perspective of our credit franchise, this moment of revived animal spirits is driving demand. We're seeing very healthy deal flow. We're seeing acquisition finance come back.” – CFO CFO Jeremy Barnum

It’s great to see NCO meaningfully tick down on a sequential basis alongside card service NCO. Improving card service NCO guidance for the year was equally encouraging. Provisions continue to rise, which is something to keep an eye on, but generally speaking, credit metrics look at equity resilience on a Q/Q and Y/Y basis. Encouraging.

Outlook & Valuation:

The firm slightly raised annual net interest income and net interest income ex-markets guidance for the year. Improved card service net charge-off rate expectations from 3.6% to 3.3% for the year. JPM trades for 15x forward EPS. EPS is expected to slightly fall this year, and compound at a 6% clip over the following two years.

b. Bank of America (BAC)

Bank of America beat revenue estimates by 2.3%. It also beat $0.95 GAAP EPS estimates by $0.11 and beat 1.98% net interest margin (NIM) estimates by 3 basis points (bps; 1 basis point = 0.01%).

Credit:

The data below looks good. 30+ day card delinquency rates and non-performing loan (NPL) rates both improved meaningfully on a Y/Y basis, while NPL matched its best result in 2 years. Credit card NCO reached its best level in over a year. Both consumer and commercial NCO data looks resilient and improving, while overall provisions are falling, which points to reasonably strong expectations for future repayment. For a giant consumer bank, this bodes quite well for durable consumer credit health.

“Asset quality remains sound with improvements in several key indicators… Focusing on total net charge-offs again and looking forward, in the near term, we would not expect much change in total net charge-offs given the steady consumer delinquency trends, stability of C&I and reductions in CRE exposures.” – CFO Alastair Borthwick

“In addition to improving consumer losses, note the reductions in both reservable criticized and NPL metrics for the commercial portfolios… We had a modest reserve release associated with improved outlooks for both credit card and commercial real estate.” – CFO Alastair Borthwick

Guidance & Valuation:

Bank of America raised its Q4 net interest income guidance from $15.6B to closer to $15.7B. This would represent about 8% Y/Y growth for Q4. For 2026, they expect to replace about $10B-$15B in assets with higher-yielding products, which should allow them to maintain 2026 growth that’s similar to 2025. Specifically, they guided to roughly 5%-7% growth for next year. BAC trades for 12x forward EPS.

c. American Express (AXP)

Results:

American Express beat revenue estimates by 2.1%. This was its fastest rate of revenue growth in 7 quarters, with the acceleration being in excess of easier Y/Y comp help. Pre-tax income beat estimates by 6.3%, its 35.9% return on equity (ROE) beat 35.5% estimates by 40 bps (basis points; 1 basis point = 0.01%). Finally, it beat $4 GAAP EPS estimates by $0.12. Strong showing.

Guidance & Valuation:

Thanks to the strong Q3 performance, it raised annual revenue growth guidance from 9% Y/Y to 9.5% Y/Y. That compares favorably to 8.5% Y/Y growth estimates. It also raised $15.25 EPS guidance to $15.35 (about 15% Y/Y growth), which met estimates. Estimates for both 2025 and 2026 are up modestly year-to-date

Credit Data & Commentary:

Credit metrics look as robust, healthy and stable as you’d expect from an ultra-prime originator like this.

“Credit performance remains excellent with both U.S. consumer and small business delinquency rates still below 2019 levels.” – CFO Christophe Le Caillec

“Q3 delinquency and write-off rates were low with delinquency rates flat to last quarter, while write-off rates declined. This performance is supported by our focus on premium products, which tend to attract high-income, highly creditworthy customers.” – CFO Christophe Le Caillec

More Big Bank Commentary from the Week:

"Credit performance remained strong and continued to improve. Commercial net loan charge-offs were stable from the second quarter with lower losses in our commercial & industrial loan portfolio, largely offset by higher commercial real estate losses... Consumers continue to be resilient as income growth has generally kept pace with increases in inflation and debt levels." – Wells Fargo CFO Mike Santomassimo

"And it's worth noting that across our U.S. cards portfolios, delinquency and NCO rate continue to perform in line with our expectations." -- Citi CFO Mark Mason

"The macro environment reflects more global resilience than many anticipated. The U.S. continues to be a pacesetter, driven by consistent consumer spending as well as tech investments.... While growth is cooling somewhat, and we're keeping an eye on the labor market, America's economic engine is indeed still humming." -- Citi CEO Jane Fraser

2. Lemonade (LMND) – Tesla & Board of Directors

a. Tesla

Quite the interesting integration announcement this week for Lemonade’s auto business. Going forward, it will be much easier for Tesla owners to use Lemonade’s pay-per-mile, telematics-based car insurance offering. No longer will they need to install a dedicated piece of hardware to gather data. Now, through a tight integration with Tesla’s API, that data will effortlessly stream behind the scenes right to Lemonade's real-time risk measurement.

Legacy players like State Farm and Allstate also have integrations with this API, but their auto products require a separate hardware installation. They both also have a much harder time perpetually and cohesively using this context-rich information. Progressive’s integration requires no dedicated hardware and they do have continuous monitoring/data collection like Lemonade. That’s the closest alternative, but Lemonade is confident in having superior data depth and breadth vs. the field. They say it all the time in earnings calls.

How can one expect a company to know a driver as well as Lemonade if they’re not collecting as much data and not as capable when it comes to making sense of it? They can’t. That’s why it’s able to uncover who is overpaying for their plans due to improper incumbent understanding of risk and a need for these people to subsidize those underpaying for plans. That’s why Lemonade takes granularity to another level. And that’s why Lemonade’s underwriting trends remain so promising despite its overall access to data being tiny compared to the big boys. A superior ability to leverage all of this valuable insight is the key.

And that key didn’t manifest by accident. It’s in their DNA. Lemonade Car was built with scalable data ingestion and telematics at the center. Their data pipeline orchestrates and delivers all needed driver context to associated teams through cohesive, interoperable, light-weight APIs. Unstructured driver data needs tagging and organizing to be used in the right ways, with Lemonade’s plumbing making that wonderfully automated and speedy. Simply put, this tech stack wasn’t built over decades of stitching together disparate systems that struggle to communicate or leverage each other. The tech and AI-native model was purpose-built for wonderful malleability, seamlessly constant software updates, bottleneck-free data consumption and integrations like this one. That means Lemonade Car can almost effortlessly integrate with a wide array of different sensors without nearly as much heavy lifting. They just move faster and more precisely.

“Our telematics pipeline architecture was built in advance so we could connect new data sources with only minor adjustments.” – Lemonade Sr. Director of Engineering Daniel Korn

This also means Lemonade will be positioned to holistically use the highly valuable data Tesla collects on these drivers to offer (it thinks) even steeper discounts vs. the field.

Others are allowed to build what Lemonade just built using the same Tesla API. The integration certainly isn’t only available to this specific company. That’s not why this is exciting. It’s exciting because it’s another signal of Lemonade’s ability to build slick integrations like this while others haven’t done nearly as good of a job. Incumbents can’t easily bend their applications to connect to other modern systems like Tesla’s. They can, and do, get part of the way there… but not all the way. Nobody else matches the onboarding ease, lower hardware needs, extensive data collection and lower Lemonade pricing. Others can match some of that equation… but not every piece. That should be a compelling offering for Tesla owners.

“In the end, a move like this is only possible thanks to great people and real technological infrastructure.” – Lemonade Senior Director of Engineering Daniel Korn

A few other notes:

This should serve as a roadmap for other Lemonade OEM integrations. No other automaker will be as easy as Tesla because their software and data collection processes are the best. But eliminating dedicated hardware needs elsewhere will go a long way in driving adoption.
There are several giant Tesla influencers on X currently giving Shai’s announcement a lot of love and encouraging a Lemonade auto and Tesla FSD partnership. It’s all speculation at this point.
Thank you to Daniel Korn (Senior VP of Engineering) for the great thread he posted on this.
Lemonade’s agentic coding capabilities made this integration buildable in a “very short period of time.”

b. Board of Directors

The company continues to beef up its board. They added Meta’s VP of AI products today. Added PayPal’s Chief Marketing Officer earlier in the month.