On Friday, Wolfe Research analyst Steven Chubak upgraded JPMorgan Chase & Co. (NYSE:JPM) stock rating from Peer Perform to Outperform, setting a price target of $269.00. Chubak's decision reflects a positive outlook for the bank's performance relative to its peers in the Universal Broker and Trust sector.
Chubak noted that although JPMorgan is not selected as a top pick for 2025, the expectation is for the stock to outperform its peers. The upgrade comes after a previous downgrade during the second quarter of 2024, where concerns about potential rate cuts impacting the bank's net interest income (NII) were prominent due to JPMorgan's significant exposure to the short end of the yield curve. According to InvestingPro, JPM has demonstrated strong financial health with consistent dividend payments for 55 consecutive years and a current dividend yield of 2.08%.
However, the landscape has shifted since then, with rate expectations adjusting upwards. Chubak now anticipates an upside to the consensus net interest income for 2026, which should support stronger earnings per share (EPS) growth through that year.
Despite the current valuation metrics, such as price-to-earnings (P/E) of 13.4x and price-to-tangible book value (P/TBV), being somewhat high compared to Money Center banks, Chubak argues that JPMorgan's consistent delivery of robust EPS and pre-provision net revenue (PPNR) growth justifies a premium valuation. InvestingPro analysis indicates the stock is currently trading above its Fair Value, with three analysts recently revising their earnings estimates upward for the upcoming period.
The firm's successful track record in capital markets and deposit share gains underpins the analyst's confidence in JPMorgan's ability to maintain strong growth. The revised price target of $269.00 reflects this optimism, suggesting potential for significant appreciation from current levels.
Chubak's analysis indicates that JPMorgan is trading at approximately 12.5 times the estimated 2026 earnings, a modest premium to its peers, which the analyst deems appropriate given the bank's performance. This aligns with InvestingPro's comprehensive financial health assessment, which rates JPM as "GOOD" with particularly strong scores in profit and price momentum metrics.
In other recent news, JPMorgan Chase has been in the spotlight with a series of significant developments.
The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Early Warning Services, the operator of Zelle, and three banks, including JPMorgan Chase, Bank of America, and Wells Fargo (NYSE:WFC). The CFPB accuses these entities of failing to protect consumers from widespread fraud on the Zelle network, leading to losses exceeding $870 million for customers of the three banks.
Additionally, JPMorgan Chase has elected Michele G. Buck, the current CEO of The Hershey Company (NYSE:HSY), to its board of directors. Buck, known for her extensive experience in the consumer-packaged goods industry, is set to begin her tenure on March 17, 2025.
In legal developments, JPMorgan Chase has concluded a long-standing lawsuit with Tesla (NASDAQ:TSLA) Inc. Both parties have agreed to drop their claims, ending a dispute that began in 2021 over a 2014 stock warrant transaction.
Moreover, the bank has successfully closed a public offering of $2.5 billion in aggregate principal amount of Fixed-to-Floating Rate Notes due in 2045. Analysts' assessments have been mixed, with Baird downgrading JPMorgan Chase stock from Neutral to Underperform, while Piper Sandler confirmed its Overweight rating.
Finally, reports have indicated that JPMorgan's CEO Jamie Dimon has been providing counsel on the policy agenda of president-elect Donald Trump.
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