It’s time to talk about $JPM otherwise known as JP Morgan Chase & Co.
Current Price: $98.21
52/Wk High: $141.10
52/Wk Low: $76.91
Read below for the breakdown.
Arguably the best bank in the world, JP Morgan Chase has become an under valued winner of late. $JPM is arguably the best bank out there and with COVID-19 running rampant through the US investors were worried going into this quarter's earnings.
$JPM held well through the pandemic for many reasons. The core protection the bank has going for it is its extremely well positioned balance sheet and experienced management at the helm.
Over the past few years $JPM has delivered top return on equity performance out of the entire financial sector. Not only that but with a solid 3% yield the stock practically pays you to hold out for straight stock growth.
Not only that but $JPM benefited largely throughout Q2 due to increased trading revenue which grew 79%, totaling $9.7 billion through equity and bond trading.
At the end of the day the pain was not as bad as expected and the bank held up quite well. Just this morning JP Morgan Chase reported upbeat earnings with an $1.38 EPS versus the expected $1.04 EPS consensus. Not only that but $JPM also delivered record revenue, coming in at a whopping $33.8 billion creating a $4.69 billion profit.
The company has also positioned itself strongly in the case of any head winds. JP Morgan Chase set aside a huge $8.9 billion in lone loss provisions for the future.
On the downside the bank reported a loss in the banking division of $176 million. This is a significant decline from the year earlier where the banking division reported a $4.2 billion profit.
Analysts are bullish on the bank with a current average price target of $106.73/share representing an 8.68% profit. Secondly the high price target is $122.00/share and low is $97.00/share so the risk on $JPM at the moment is relatively low when compared to price targets.
The big money is also very bullish on JP Morgan Chase & Co. Currently 70.59% of common stock of $JPM is owned by institutions. Top holders include Berkshire Hathaway, Black Rock, and Capital World Investors.
At the end of the day the outlook is still muddy and this was reiterated by CEO Jamie Dimon. “Despite some recent positive macroeconomic data and significant, decisive government action, we still face much uncertainty regarding the future path of the economy,” Dimon said.
Overall with the beat today, the hopeful but muddied out look, and in my opinion undervalued current pricing of the stock, I see no reason the stock should not run in coming weeks. While the outlook is uncertain, the economy is coming back and it seems the worst is over.
On the other hand COVID-19 cases are resurging and that must be looked at as a risk to an investment in $JPM. Finally remember that $GS reports tomorrow and a positive beat on that would most likely propel the banking sector further north in the coming weeks.
For full disclosure I own the stock long and think $JPM can hit a short term price target of $105/share and long term price target of $122/share.
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Disclaimer: This is not direct financial advice, simply opinion based on independent research.