On Wednesday, Goldman Sachs reaffirmed its Buy rating and $273.00 price target for JPMorgan (NYSE:JPM) shares, following the bank's fourth-quarter earnings release. Currently trading near its 52-week high at $247.47, InvestingPro analysis indicates the stock is slightly overvalued at current levels.
JPMorgan reported a fourth-quarter earnings per share (EPS) of $4.81, surpassing both Goldman Sachs' estimate and the Visible Alpha Consensus Data, which were $4.10 and $4.08, respectively. Notably, 9 analysts have recently revised their earnings estimates upward for the upcoming period. The core EPS, adjusted for various non-core items, was $4.76, exceeding the anticipated figures of $4.41 and $4.33 from Goldman Sachs and consensus estimates.
Goldman Sachs predicts a favorable market response to JPMorgan's performance, highlighting the bank's stronger-than-expected net interest income (NII) and fees, increased 2025 NII guidance excluding markets, and maintained expense guidance for the same year.
With a robust P/E ratio of 13.68 and impressive revenue growth of 13.86%, the bank's financial health score is rated as GOOD by InvestingPro, which offers 8 additional key insights about JPM's valuation and growth prospects. The bank's quarterly core return on tangible common equity (ROTCE) of 20.2% significantly outperformed the consensus and management's medium-term ROTCE target of 17%.
The report detailed JPMorgan's NII beating expectations due to a lower than anticipated net interest margin (NIM) on reduced deposit costs, despite a decrease in average earning assets. Core fee income also saw a 4% rise, boosted by higher capital markets and consumer fees. Moreover, the core efficiency ratio was 230 basis points better than the consensus estimates.
JPMorgan's stock repurchase activity for the quarter amounted to $4.3 billion, and the common equity tier 1 (CET1) ratio stood at 15.7%, well above the 13.5% target. Management has raised the 2025 NII guidance excluding markets to $90 billion from the previous estimate of around $89 billion and introduced an all-in NII guidance of $94 billion, compared to Goldman Sachs and the Street's projections of $92.7 billion and $91.1 billion, respectively.
Expense guidance for 2025 remains unchanged at approximately $95 billion, aligning with the figures projected by Goldman Sachs and the Street.
Goldman Sachs anticipates further details on several aspects, including the assumptions behind the NII guidance up to 2025, capital markets outlook, potential efficiency improvements, credit normalization trajectory, and the early indications of excess capital deployment under the new U.S. presidential administration.
With a market capitalization of $696.71 billion and a consistent dividend yield of 2.02%, JPMorgan has maintained dividend payments for 55 consecutive years. For deeper insights into JPM's financial health and future prospects, investors can access the comprehensive Pro Research Report available on InvestingPro, which provides detailed analysis of what really matters for this banking giant.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.