JPMorgan's top financial sector short ideas going into Q4

[Closeup of computer keyboard with short and long buttons. Stock market, Trading concept.]
Sashkinw

As October kicks off and market participants enter the fourth quarter of 2025, JPMorgan surveyed its top-ranked U.S. equity analysts and picked out what it called "their most compelling structural and tactical short ideas" across sectors.

Looking at the financial sector (NYSEARCA:XLF [https://seekingalpha.com/symbol/XLF]), JPMorgan identified five top short ideas: Texas Capital Bancshares (NASDAQ:TCBI [https://seekingalpha.com/symbol/TCBI]), T. Rowe Price (NASDAQ:TROW [https://seekingalpha.com/symbol/TROW]), Oportun Financial (NASDAQ:OPRT [https://seekingalpha.com/symbol/OPRT]), Travelers (NYSE:TRV [https://seekingalpha.com/symbol/TRV]), and Lincoln National (NYSE:LNC [https://seekingalpha.com/symbol/LNC]).

The S&P 500 financial sector (NYSEARCA:XLF [https://seekingalpha.com/symbol/XLF]) has been the fifth best performing one in 2025, gaining +11.26% YTD. Financial stocks have been buoyed by high interest rates, but risks remain in the form of the Federal Reserve potentially starting a monetary policy easing cycle and tariffs hitting consumer spending.

See below JPMorgan's rationale behind its five top financial short ideas and their rating. Also given are the stocks' YTD performance and their Seeking Alpha Quant rating:

TEXAS CAPITAL BANCSHARES (NASDAQ:TCBI [https://seekingalpha.com/symbol/TCBI])

Stock -10.8% YTD; JPMorgan's rating: Underweight; Quant rating: Strong Buy, 4.63 [https://seekingalpha.com/symbol/TCBI/ratings/quant-ratings].

Rationale: We see limited mortgage finance loan activity and the company has among the highest earning asset yields in our coverage, which should mitigate the NII benefit from lower funding costs in a backdrop of lower short-term rates—even with the company having among the highest deposit costs among our coverage.

T. ROWE PRICE (NASDAQ:TROW [https://seekingalpha.com/symbol/TROW])

Stock -6.5% YTD; JPMorgan's rating: Underweight; Quant rating: Hold, 3.35 [https://seekingalpha.com/symbol/TROW/ratings/quant-ratings].

Rationale: Organic outflows remain heightened despite the stronger equity market backdrop. TROW’s business is disproportionately weighted toward active equities, which continue to experience secular headwinds, while the company’s growth initiatives have yet to gain meaningful traction. Despite the stock’s underperformance, valuation is still unattractive as we think TROW should trade below the peer avg of 11x P/E.

OPORTUN FINANCIAL (NASDAQ:OPRT [https://seekingalpha.com/symbol/OPRT])

Stock +39.4% YTD; JPMorgan's rating: Underweight; Quant rating: Buy, 4.47 [https://seekingalpha.com/symbol/OPRT/ratings/quant-ratings].

Rationale: We believe OPRT could face incremental headwinds as balance sheets for low-income consumers deteriorate. OPRT may sit more towards the cross-section that could benefit from more stringent immigration policies, but still resides firmly in the non-prime category which we think warrants caution at this point in the cycle.

TRAVELERS (NYSE:TRV [https://seekingalpha.com/symbol/TRV])

Stock +18.3% YTD; JPMorgan's rating: Underweight; Quant rating: Hold, 3.44 [https://seekingalpha.com/symbol/TRV/ratings/quant-ratings].

Rationale: We have a cautious outlook for commercial lines market, mixed business trends and overly optimistic consensus estimates.

LINCOLN NATIONAL (NYSE:LNC [https://seekingalpha.com/symbol/LNC])

Stock +26.3% YTD; JPMorgan's rating: Underweight; Quant rating: Hold, 3.46 [https://seekingalpha.com/symbol/LNC/ratings/quant-ratings].

Rationale: We see a high-risk liability profile, mixed business trends, and limited capital flexibility; more downside if macro (equity markets, interest rates) is negative than upside if macro is favorable, in our view.

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