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JPM

JPMorgan Chase NYSE:JPM Stock Report

Last Price

US$122.13

Market Cap

US$352.3b

7D

5.5%

1Y

-23.7%

Updated

12 Aug, 2022

Data

Company Financials +
JPM fundamental analysis
Snowflake Score
Valuation5/6
Future Growth1/6
Past Performance2/6
Financial Health6/6
Dividends5/6

JPM Stock Overview

JPMorgan Chase & Co. operates as a financial services company worldwide.

JPMorgan Chase Competitors

Price History & Performance

Summary of all time highs, changes and price drops for JPMorgan Chase
Historical stock prices
Current Share PriceUS$122.13
52 Week HighUS$172.96
52 Week LowUS$106.06
Beta1.1
1 Month Change9.13%
3 Month Change2.55%
1 Year Change-23.66%
3 Year Change13.38%
5 Year Change34.59%
Change since IPO1,121.30%

Recent News & Updates

Aug 11

JPMorgan Chase: Undervalued, But Shareholder Rewards Unlikely Until 2023

Adding back to credit reserves has crimped 2022 EPS expectations for JPM, but the compares get easier after Q2 '22. CCAR threw a wet blanket over JPM when results came out in June '22, but the buyback, which is temporarily suspended, will return for JPM. The next dividend increase will be announced this quarter and paid in early October, '22. The dividend should increase $0.10 per quarter or $0.40 from Q3 '22 through Q2 '23. Morningstar's 'fair value' estimate for JPM is $151 per share, leaving the stock at a discount to Mstar's fair value around 25%. Year-to-date (YTD) as of last night's (Tuesday, August 9th, 2022) close, JPMorgan's stock was still down -23.34% YTD while the SP 500 was down YTD -12.75%, for a YTD performance shortfall of over 1,000 basis points, which is certainly better than Coinbase and Carvana (a little humor and also no positions) but the decline still smarts. Let's look at the annual EPS and revenue figures for the last several years: EPS y/y gro Revenue y/y gro 2024 - est $13.66 +8% $142.4 3% 2023 - est $12.57 +13% $137.4 8% 2022 - est $11.20 -27% $127.1 5% 2021 $15.34 67% $121.6 bl 2% 2020 $8.87 -17% $120.3 bl 4% 2019 $10.72 19% $115.6 bl 9% 2018 $8.98 31% $105.8 bl 5% 2017 $6.88 16% $100.8 bl 3% Source: valuation spreadsheet from earnings reports and consensus estimates from IBES data by Refinitiv If you look at the expected revenue growth from 2022 to 2024, the consensus revenue estimate numbers, which have been rising, are expected to grow at an average rate of 5% per year, the same average rate of growth from 2017 - 2021. Financials as a sector, and particularly the big banks that benefitted from the Fed's massive liquidity additions, as well as the Congressional stimulus, have to pay the price in 2022 to build back credit reserves, that were all released in 2021. But the nice thing is that after Q2 '22 results, now in the books, the compares get easier, not just for JPMorgan but for many of the big banks and brokers. Both JPMorgan and Bank of America saw better net interest income (NII) from rising interest rates, and softer fees, probably from the mortgage businesses. Since the market lows in mid-June and the peak in interest rates - mainly the 10-year Treasury peaking at 3.5% also in mid-June - that trade will start to reverse. JPMorgan's operating results by segment: JPM operating results by segment (earnings reports, 10-Qs ) We are going to leave readers with one last table of JPM's operating results for the last 5 quarters. It's JPMorgan's "Corporate & Investment Bank" ((CIB)) (line 2) that tends to generate upside delay in EPS in good markets and thus becomes a drag or pull on EPS in tougher markets, as we saw in the first 6 months of 2022. Note the steady decline in CIB in terms of operating income from Q1 '21. That's been the big drag on the bank, and after Q2 '22 that starts to get easier. Summary / conclusion: Now that the toughest of the 2021 compares have passed for JPMorgan, and if the bottom has been put in as of mid-June '22, the year-over-year compares should look better and 2022 numbers should start to improve. However, owning the stock today, means investors likely have to wait for 2023 to see some material relative performance for the stock. Jamie Dimon's "hurricane" comments seem puzzling in hindsight, particularly after the July '22 nonfarm payroll report saw a 584,000 net new job increase by the US economy, which should portend well for JPMorgan's consumer segment, which is the largest segment of the bank by revenue. (It was interesting reading the JPM conference call notes after earnings, which readers can find here on Seeking Alpha, but Mike Mayo went after Jamie Dimon a little bit for the histrionics and hyperbole around the economy that Jamie made in early '22.)

Aug 03

JPMorgan Chase: The Industry Leader Is Too Cheap To Ignore

JPMorgan is the U.S.' biggest bank, with a balance sheet size of about $2.87 trillion. JPM has leading interests in retail banking, wealth management, asset management, global markets, and investment banking. The bank's stock is down almost 30% YTD and now trades at a P/E below x10, P/S below x3 and P/B below x1.5. JPM is currently valued like a "normal" bank, not like a leader. I see material upside of almost 70%, as I value JPM stock based on a residual earnings framework and analyst consensus EPS. Thesis I prefer the best over the cheapest. While the best doesn't always come at a reasonable price, in rare occasions the patient investors can accumulate shares of an industry leader at depressed prices. Then it pays to be aggressive. Looking at JPMorgan Chase & Co.'s (JPM) risk/reward ratio, I argue the industry leader in banking is currently on sale. JPMorgan stock is down almost 30% YTD and now trades at a P/E below x10, P/S below x3 and P/B below x1.5. While JPM is trading at a premium to US industry peers such as Citigroup (C) and Bank of America (BAC), I argue the premium is justified. Seeking Alpha I see material upside of almost 70% as I value JPM stock based on a residual earnings framework and analyst consensus EPS. My target price is $194.48/share. The Leading Global Bank JPMorgan is the U.S.' biggest bank, with a balance sheet size of about $2.87 trillion. Thus, JPM is about $700 million bigger than the U.S.' second biggest bank: Bank of America. However, a simple comparison of balance sheet size does not fully capture the bank's leading position. JPMorgan is a diversified financial service provider and has interests in retail/consumer banking, private wealth management, asset management, global markets/trading, and investment banking. While many banks have an interest in all these verticals, including Citi, BofA, and UK's Barclays (BCS), arguably only JPMorgan is an undisputed top three, if not top one, contender in all of the above-mentioned business segments. As of December 2021, JPM generates about 40% of total revenue from consumer/retail banking, 37% from corporate and investment banking (which also includes securities trading and the broader global markets segment), 14% from wealth & asset management and about 8% from commercial banking. Investopedia JPMorgan's diversified revenue exposure is important, and arguably underappreciated. It makes the bank much less vulnerable to cyclical downturns as many market participants think. For example, in low interest rate environments and steady markets, the investment banking and wealth management arm is poised to deliver a strong performance. In a stressed market, trading and global market activities outperform. And rising interest rates stimulate income from consumer lending exposure. Not Cheap But Very Attractive Buying JPMorgan stock is not cheap when compared to the US' and European banking peers. Specifically, JPM trades at a P/E of about x10, P/S of about x2.5 and P/B of almost x1.5. For reference, Citi trades at a P/E of x7 and a P/B of x0.55. Similarly, Deutsche Bank (DB) is valued at a P/E of x6 and a P/B of x0.25. But buying cheap can be expensive -- especially in the banking industry. This has been demonstrated by the "cheap banks," who have underperformed the market and JPMorgan for many years. Seeking Alpha Moreover, please ignore JPM's relative premium for a moment and focus on the company's absolute valuation and risk/reward. According to research by Goldman Sachs, the cyclical low for bank stocks is usually around the x1 P/B multiple, and the historical average is somewhere around x1.5. That said, JPM--the industry leader--is currently trading at levels equal to the historical average of the banks. Or in other words, JPM is currently valued like a "normal" bank, not like the leader. Goldman Sachs Research, Financial Times Graph Residual Earnings Valuation In my opinion, banks are prime candidates to be valued with a residual earnings ("RE") valuation, given that the RE framework anchors on both the income statement and the balance sheet as well as accrual accounting. That said, I apply the following assumptions: To forecast EPS, I anchor on consensus analyst forecast as available on the Bloomberg Terminal 'till 2023. In my opinion, any estimate beyond 2023 is too speculative to include in a valuation framework - especially for banks. To estimate the cost of capital, I use the WACC framework. I model a three-year regression against the S&P 500 to find the stock's beta. For the risk-free rate, I used the U.S. 10-year treasury yield as of July 29, 2022. My calculation indicates a fair required return of about 10%. To derive JPM's tax rate, I extrapolate the 3-year average effective tax-rate from 2019, 2020 and 2021. For the terminal growth rate, I apply 3% percentage points, approximately the nominal GDP growth, which I think is a fair assumption for an industry leader.

Jul 22

JPMorgan Chase and Instacart to launch new Instacart Mastercard credit card

JPMorgan Chase (NYSE:JPM) and North America-based grocery technology company, Instacart launched the new Instacart Mastercard credit card, with Mastercard as the exclusive payments network. With this first-ever credit card from Instacart, cardmembers can earn unlimited cash back with a range of redemption options.

Shareholder Returns

JPMUS BanksUS Market
7D5.5%5.5%1.3%
1Y-23.7%-13.2%-11.7%

Return vs Industry: JPM underperformed the US Banks industry which returned -13.2% over the past year.

Return vs Market: JPM underperformed the US Market which returned -11.7% over the past year.

Price Volatility

Is JPM's price volatile compared to industry and market?
JPM volatility
JPM Average Weekly Movement4.3%
Banks Industry Average Movement3.7%
Market Average Movement7.8%
10% most volatile stocks in US Market16.9%
10% least volatile stocks in US Market3.2%

Stable Share Price: JPM is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: JPM's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
1799278,494Jamie Dimonhttps://www.jpmorganchase.com

JPMorgan Chase & Co. operates as a financial services company worldwide. It operates through four segments: Consumer & Community Banking (CCB), Corporate & Investment Bank (CIB), Commercial Banking (CB), and Asset & Wealth Management (AWM). The CCB segment offers s deposit, investment and lending products, payments, and services to consumers; lending, deposit, and cash management and payment solutions to small businesses; mortgage origination and servicing activities; residential mortgages and home equity loans; and credit card, auto loan, and leasing services.

JPMorgan Chase Fundamentals Summary

How do JPMorgan Chase's earnings and revenue compare to its market cap?
JPM fundamental statistics
Market CapUS$352.32b
Earnings (TTM)US$37.20b
Revenue (TTM)US$120.58b

9.6x

P/E Ratio

1.4x

P/B Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
JPM income statement (TTM)
RevenueUS$120.58b
Cost of RevenueUS$0
Gross ProfitUS$120.58b
Other ExpensesUS$83.38b
EarningsUS$37.20b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

Oct 14, 2022

Earnings per share (EPS)12.68
Gross Margin100.00%
Net Profit Margin30.85%
Debt/Equity Ratio221.0%

How did JPM perform over the long term?

See historical performance and comparison

Dividends

3.3%

Current Dividend Yield

32%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is JPM undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for JPM?

Other financial metrics that can be useful for relative valuation.

JPM key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenuen/a
Enterprise Value/EBITDAn/a
PEG Ratio1.5x

Price to Earnings Ratio vs Peers

How does JPM's PE Ratio compare to its peers?

JPM PE Ratio vs Peers
The above table shows the PE ratio for JPM vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average9.8x
BAC Bank of America
11x9.1%US$291.7b
WFC Wells Fargo
10.6x14.3%US$174.3b
C Citigroup
6.7x0.4%US$105.3b
USB U.S. Bancorp
11.2x14.4%US$72.5b
JPM JPMorgan Chase
9.6x6.5%US$358.2b

Price-To-Earnings vs Peers: JPM is good value based on its Price-To-Earnings Ratio (9.6x) compared to the peer average (9.9x).


Price to Earnings Ratio vs Industry

How does JPM's PE Ratio compare vs other companies in the US Banks Industry?

Price-To-Earnings vs Industry: JPM is good value based on its Price-To-Earnings Ratio (9.6x) compared to the US Banks industry average (10x)


Price to Earnings Ratio vs Fair Ratio

What is JPM's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

JPM PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio9.6x
Fair PE Ratio16.3x

Price-To-Earnings vs Fair Ratio: JPM is good value based on its Price-To-Earnings Ratio (9.6x) compared to the estimated Fair Price-To-Earnings Ratio (16.3x).


Share Price vs Fair Value

What is the Fair Price of JPM when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: JPM ($122.13) is trading below our estimate of fair value ($198.02)

Significantly Below Fair Value: JPM is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.


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Future Growth

How is JPMorgan Chase forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


6.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: JPM's forecast earnings growth (6.5% per year) is above the savings rate (1.9%).

Earnings vs Market: JPM's earnings (6.5% per year) are forecast to grow slower than the US market (14.4% per year).

High Growth Earnings: JPM's earnings are forecast to grow, but not significantly.

Revenue vs Market: JPM's revenue (6% per year) is forecast to grow slower than the US market (7.9% per year).

High Growth Revenue: JPM's revenue (6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: JPM's Return on Equity is forecast to be low in 3 years time (13.3%).


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Past Performance

How has JPMorgan Chase performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


11.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: JPM has high quality earnings.

Growing Profit Margin: JPM's current net profit margins (30.8%) are lower than last year (35.7%).


Past Earnings Growth Analysis

Earnings Trend: JPM's earnings have grown by 11.9% per year over the past 5 years.

Accelerating Growth: JPM's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: JPM had negative earnings growth (-19.2%) over the past year, making it difficult to compare to the Banks industry average (9.2%).


Return on Equity

High ROE: JPM's Return on Equity (13.6%) is considered low.


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Financial Health

How is JPMorgan Chase's financial position? (This company is analysed differently as a bank or financial institution)

Financial Health Score

6/6

Financial Health Score 6/6

  • Asset Level

  • Allowance for Bad Loans

  • Low Risk Liabilities

  • Loan Level

  • Low Risk Deposits

  • Level of Bad Loans

Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet


Financial Institutions Analysis

Asset Level: JPM's Assets to Equity ratio (13.4x) is moderate.

Allowance for Bad Loans: JPM has a sufficient allowance for bad loans (248%).

Low Risk Liabilities: 70% of JPM's liabilities are made up of primarily low risk sources of funding.

Loan Level: JPM has an appropriate level of Loans to Assets ratio (28%).

Low Risk Deposits: JPM's Loans to Deposits ratio (44%) is appropriate.

Level of Bad Loans: JPM has an appropriate level of bad loans (0.6%).


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Dividend

What is JPMorgan Chase current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Future Dividend Coverage


3.28%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: JPM's dividend (3.28%) is higher than the bottom 25% of dividend payers in the US market (1.49%).

High Dividend: JPM's dividend (3.28%) is low compared to the top 25% of dividend payers in the US market (4%).


Stability and Growth of Payments

Stable Dividend: JPM's dividends per share have been stable in the past 10 years.

Growing Dividend: JPM's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (32%), JPM's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: JPM's dividends in 3 years are forecast to be well covered by earnings (33.9% payout ratio).


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Management

How experienced are the management team and are they aligned to shareholders interests?

1.4yrs

Average management tenure


CEO

Jamie Dimon (66 yo)

16.67yrs

Tenure

US$84,428,145

Compensation

Mr. James Dimon, also known as Jamie, has been the Chairman and Chief Executive Officer of JPMorgan Chase & Co. since December 31, 2006 and December 31, 2005 respectively and served as its President since...


CEO Compensation Analysis

Compensation vs Market: Jamie's total compensation ($USD84.43M) is above average for companies of similar size in the US market ($USD12.88M).

Compensation vs Earnings: Jamie's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

Experienced Management: JPM's management team is not considered experienced ( 1.4 years average tenure), which suggests a new team.


Board Members

Experienced Board: JPM's board of directors are considered experienced (8.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

JPMorgan Chase & Co.'s employee growth, exchange listings and data sources


Key Information

  • Name: JPMorgan Chase & Co.
  • Ticker: JPM
  • Exchange: NYSE
  • Founded: 1799
  • Industry: Diversified Banks
  • Sector: Banks
  • Implied Market Cap: US$352.319b
  • Shares outstanding: 2.93b
  • Website: https://www.jpmorganchase.com

Number of Employees


Location

  • JPMorgan Chase & Co.
  • 383 Madison Avenue
  • New York
  • New York
  • 10179
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/12 00:00
End of Day Share Price2022/08/12 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.