JP Morgan Chase & Co. (JPM) stock analysis: Hold

Bro's Verdict
Deep Dive

Rating

HOLD

Confidence

65%

Target Price

$360.00

Upside

+7.7%

Horizon

medium

JPM is the highest quality money center bank, but at $334.30 it trades at 13.4x NTM EPS and 2.5x book, a 25% premium to its own two-year average forward multiple and +2.7 SD on book, while consensus models only 1.3% EPS growth into FY+2. The $360 target implies roughly 8% upside, below the 10% threshold for a BUY, and the stock has already de-rated 6.2% over one month even as estimates rose 0.4%, pointing to multiple compression rather than estimate cuts. Risk/reward is balanced, so we stay on Hold pending confirmation that ROTCE holds above 18% or a pullback toward $300.

Executive Summary

•JPM trades at 13.4x NTM EPS ($24.97) and 2.5x book, a 25% premium to its own two year average forward P/E of 10.6x and an 87% premium on book (+2.7 SD), so the market is already paying for ROTCE holding near 18% while consensus models only +1.3% EPS growth into FY+2.

•Net interest income is the swing variable: card NII and higher revolving balances drove Consumer & Community Banking revenue of $19.66b, up 7% year over year, but consensus NTM revenue growth of just 3.0% to $208.27b implies deposit repricing and Fed cuts stall the NII trajectory from 2027.

•Capital return is the most dependable EPS lever, with a dividend increase and a new common share repurchase authorisation in place, enough to deliver low single digit share count reduction and hold EPS flat even if net income plateaus.

•Risk/reward is balanced at $334.30: 11.6% upside to the $373.18 consensus target against a book multiple at a two year high and a share price down 6.2% over one month while NTM EPS revisions were +0.4%, which points to multiple compression rather than estimate cuts.

Financial Snapshot

•Revenue (TTM): $186.33b

•Revenue (NTM consensus): $208.27b (+3.0% YoY)

•Net income (TTM, implied at 34.9% net margin): ~$65.0b

•Net margin: 34.9%

•Operating margin: 50.4%

•ROE: 17.8%

•EPS (TTM): Not disclosed; implied ~$29.9 on ~2.17b shares

•EPS (NTM consensus): $24.97

•Market cap: $726.56b

•Share price: $334.30

•52 week range: $279.10 to $366.50

•Last four reported quarters, revenue: $57.35b, $49.84b, $45.80b, $46.43b

•Last four reported quarters, net income: $20.75b, $16.15b, $12.69b, $14.04b

•Quarterly revenue sums to $199.4b versus $186.33b TTM, indicating a reporting window mismatch in the source data

Forward Outlook

•Revenue guidance: Not disclosed; NTM revenue consensus $208.27b, +3.0% versus TTM

•FY+2 revenue consensus: $214.53b, +3.0% versus NTM

•EPS estimates: NTM consensus $24.97; FY+2 consensus $25.28, +1.3% versus NTM

•NTM EPS revision trend: $25.12 now versus $25.03 one month ago, +0.4%

•Net interest income guidance: Not disclosed in source data; management attributes CCB growth to card NII, revolving balances, operating lease income and auto

•Deposit repricing sensitivity: Not disclosed; consensus revenue growth of 3.0% implies limited NII expansion beyond balance sheet growth

•Margin trajectory: net margin 34.9% and operating margin 50.4%, with consensus implying broadly flat margins as revenue and expense growth track together

•Capital return: dividend increase and new common share repurchase authorisation announced, supporting low single digit annual share count reduction

•Estimate coverage: 11 analysts, so consensus dispersion is wider than for larger coverage universes

Valuation Analysis

•NTM P/E: 13.4x on $24.97

•TTM P/E: ~11.2x on implied TTM EPS of ~$29.9

•NTM P/S: 4.27x as reported; a market cap cross check on $208.27b NTM revenue gives ~3.5x

•NTM EV/EBIT: Not disclosed

•Trailing EV/EBIT: 8.3x versus two year average of 12.7x, though EV based multiples are distorted for a deposit funded balance sheet

•Trailing EV/EBITDA: 7.7x versus two year average of 10.5x, same caveat

•Forward P/E versus own history: 13.3x versus two year average of 10.6x, +1.1 SD, +25%, implied price at average $266.45

•P/B: 2.5x versus two year average of 1.3x, +2.7 SD, +87%, implied price at average $178.65

•Justified P/B at 17.8% ROTCE, 9.5% cost of equity and 3% growth: ~2.3x, implying ~$307

•Justified P/B at 18% ROTCE and 9.0% cost of equity: ~2.5x, implying ~$334, which is where the stock trades today

•Fair value range: $340 to $380

•12 month price target: $360, equal to 14.4x NTM EPS and ~2.7x book

•Consensus target: $373.18 (median $370, range $305 to $420)

•Ratings: 32 Buy, 27 Hold, 2 Sell

•JPM: ~11.2x TTM P/E, 13.4x NTM P/E, $726.6b market cap, best in class ROTCE and franchise breadth

•BAC: 12.6x TTM P/E, $381.7b market cap, consumer and wealth franchise, more rate sensitive deposit base

•C: 14.2x TTM P/E, $221.3b market cap, deepest discount to book, most restructuring leverage

•WFC: 12.1x TTM P/E, $252.0b market cap, asset cap removal is the primary earnings lever

•GS: 13.8x TTM P/E, $260.3b market cap, pure play investment banking and trading, highest revenue cyclicality

Key Risks & Catalysts

Risks

•Deposit repricing: Fed cuts lower asset yields faster than deposit costs on the way down, compressing net interest income

•Card credit: charge offs normalising toward pre pandemic levels with revolving balances at cycle highs

•Commercial real estate: office and multifamily reserves may need further builds if valuations reset

•Basel III endgame: higher risk weighted assets could lift the CET1 requirement and constrain buyback capacity

•Multiple risk: 2.5x book is +2.7 SD versus its own two year average, leaving no valuation cushion

•Trading revenue durability: capital markets revenue is volatile and a spread widening cycle pressures fixed income

•AI related capex issuance is expected to widen high grade credit spreads in 2026, pressuring trading and underwriting revenue

•Low consensus EPS growth of 1.3% means a single negative revision is poorly cushioned

•Insider activity: two open market sales and zero open market buys over the last 90 days, net $1.8m sold

Catalysts

•Dividend increase and new common share repurchase authorisation already in place

•Card NII growth from higher revolving balances and operating lease income

•Investment banking fee recovery as M&A and leveraged buyout activity accelerates

•ROTCE holding above 17% would validate the current book multiple

•Fed cut cycle steepening the curve and lowering funding costs faster than asset yields

•Consensus target of $373.18 implies 11.6% upside with 32 Buy ratings

•NTM EPS revisions already positive at +0.4% over one month while the share price fell 6.2%

Investment Thesis

JPM is the highest quality balance sheet in money center banking, with a 17.8% ROE, a 34.9% net margin and a franchise spanning consumer, corporate and investment banking, and asset and wealth management. The problem is price. At $334.30 the stock trades at 13.4x NTM EPS and 2.5x book, a 25% premium to its own two year average forward multiple and an 87% premium on book, or +2.7 standard deviations. Consensus models only 1.3% EPS growth into FY+2, which means the current multiple is a bet on ROTCE staying near 18% through a credit normalisation and a Fed easing cycle, not a bet on earnings growth.

The earnings engine is net interest income, and it is decelerating. Card NII and higher revolving balances drove CCB revenue of $19.66b, up 7% year over year, but consensus revenue growth of 3.0% to $208.27b for NTM and 3.0% again into FY+2 implies NII expansion stalls as deposit costs reprice and loan yields fall. Credit is the second lever, with card charge offs normalising and commercial real estate reserves still a live risk. Capital return is the offset, with a dividend increase and a new buyback authorisation supporting low single digit share count reduction, enough to keep EPS flat to modestly higher even if net income plateaus.

Recommendation: Hold with a 12 month price target of $360, equal to 14.4x NTM EPS and about 2.7x book, roughly 8% upside. The consensus target of $373.18 offers 11.6% upside, but the stock has already de rated 6.2% over one month while estimates rose 0.4%, and a 2.5x book multiple at +2.7 SD leaves no room for a credit or capital surprise. We would upgrade toward $300, where the stock would trade at 12x NTM EPS and about 2.2x book, or if ROTCE is confirmed above 18% for two consecutive quarters.

Written by Buy Side Bro's AI analyst from financials, consensus, filings and recent news. General information only, not financial advice.

JP Morgan Chase & Co. JPM

Bro's Verdict
Deep Dive

Executive Summary

Financial Snapshot

Forward Outlook

Valuation Analysis

Key Risks & Catalysts

Investment Thesis

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Bro's VerdictDeep Dive

Executive Summary

Financial Snapshot

Forward Outlook

Valuation Analysis

Key Risks & Catalysts

Investment Thesis

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Bro's Verdict
Deep Dive