Economic Slowdown - filings, earnings calls, financial reports, news

Economic Slowdown

Search documents

Is JPMorgan Stock a Buy for 2026 as it Hits an All-Time High?

ZACKS· 2025-12-24 14:56

Core Insights - JPMorgan's shares reached an all-time high of $327.78, driven by optimism regarding the easing rate cycle, stronger U.S. GDP growth, and potential entry into the crypto trading business [1][10] Performance Comparison - Over the past six months, JPMorgan shares have increased by 14.8%, while the S&P Index gained 15.7%. In comparison, Bank of America and Citigroup saw increases of 19.5% and 44.5%, respectively [2] Valuation Metrics - JPMorgan's stock trades at a price-to-tangible book (P/TB) ratio of 3.27X, above the industry average of 3.20X. Bank of America and Citigroup have P/TB ratios of 2.04X and 1.30X, respectively [5] - The Value Score of F indicates that JPMorgan's stock is not considered cheap, suggesting a stretched valuation [5] Business Model Resilience - JPMorgan operates across multiple segments, including consumer banking, commercial banking, investment banking, and wealth management, providing diverse revenue streams that enhance its resilience [11] - The bank benefits from a stable deposit base, with a loans-to-deposit ratio of 56% as of September 30, 2025, allowing for low-cost funding [12] - Approximately 45% of total net revenues come from fee-based income, which enhances stability and reduces reliance on interest-rate dynamics [13] Growth Strategy - JPMorgan is expanding its branch network, opening nearly 150 branches in 2024 and planning to add 500 more by 2027 to strengthen its competitive edge [14] - The bank has consistently delivered industry-leading returns through disciplined risk management and a focus on high-quality lending [15] Profitability Expectations - Despite expected pressure on net interest income (NII) due to declining rates, JPMorgan anticipates NII to be nearly $92.2 billion in 2025 and $95 billion in 2026 [16] - Non-interest income streams from trading, investment banking, payments, and wealth management provide additional earnings stability [17] Leadership and Execution - Under Jamie Dimon's leadership, JPMorgan has emphasized conservatism and capital strength, enabling it to outperform competitors during crises [18] - The bank's strong balance sheet includes total debt of $496.6 billion and cash and deposits of $303.4 billion as of September 30, 2025 [19] Shareholder Returns - JPMorgan has increased its quarterly dividend by 7% to $1.50 per share and authorized a new share repurchase program worth $50 billion [20] - The bank has raised dividends six times in the last five years, with an annualized growth rate of 8.94% [21] Earnings Estimates - The Zacks Consensus Estimate for JPMorgan's earnings in 2025 is $20.32, with a slight decline to $21.03 for 2026, indicating elevated non-interest expense expectations [25] - The consensus for revenue growth suggests increases of 2.8% in 2025 and 3.9% in 2026 [25] Investment Consideration - Despite its premium valuation, JPMorgan's size, diversification, and track record make it a reasonable core holding for a multi-year horizon [29]