Baird has made an adjustment to its price target on shares of JPMorgan Chase & Co. (NYSE: NYSE:JPM), increasing it to $200 from the previous $195.
The firm maintained a Neutral rating on the stock. The adjustment follows JPMorgan's third-quarter earnings report, which revealed earnings per share (EPS) of $4.38, surpassing the consensus estimate of $4.00.
The bank's core pre-provision net revenue (PPNR) was slightly lower sequentially but showed a year-over-year increase of 5%. Additionally, the results included better-than-expected charge-offs and higher reserve builds, particularly in card loan growth.
JPMorgan has also demonstrated its financial strength by repurchasing approximately $6 billion of its shares during the quarter while maintaining a Common Equity Tier 1 (CET1) ratio of around 15.3%. Over three months, the bank generated roughly $12.5 billion of capital, which represents a return on tangible common equity (ROTCE) of approximately 19%, versus its long-term target of 17%.
Despite a solid quarter, the analyst noted that JPMorgan is still facing challenges with NII, anticipating a mid-fiscal year 2025 cyclical trough. This is in contrast to regional banks, which have already moved past their inflection points.
Moreover, the finalization of Basel III enhanced (B3E) rules could potentially unlock around $40 billion of capital, which is higher than the management's expectation of over $30 billion. However, the pace of share buybacks is expected to be moderate, considering the stock's tangible book value (TBV) premium, which stands at approximately 2.35 times TBV compared to the mega-cap peers' average of around 1.55 times TBV. The analyst concluded by advising against chasing the stock's current outperformance.
In other recent news, JPMorgan Chase has reported strong financial results for the third quarter of 2024. The bank's net income reached $12.9 billion, with earnings per share standing at $4.37, and total revenue hitting $43.3 billion, marking a 6% year-on-year increase. Following these results, Barclays and Evercore ISI raised their price targets for JPMorgan to $257 and $230 respectively, while Citi maintained a Neutral rating with a target of $215.
Analysts from Evercore ISI highlighted potential growth for JPMorgan in the second half of 2025, citing strong performances in investment banking, asset and wealth management, and card services. However, Citi analysts suggested that actual figures may surpass current consensus estimates by 2026.
InvestingPro Insights
JPMorgan Chase & Co.'s recent performance aligns with several key metrics and trends highlighted by InvestingPro. The bank's strong financial position is reflected in its market capitalization of $625.81 billion, underlining its status as a prominent player in the banking industry. JPMorgan's P/E ratio of 12.37 suggests that the stock is trading at a reasonable valuation relative to its earnings, which is particularly noteworthy given its robust performance.
InvestingPro Tips reveal that JPMorgan has raised its dividend for 14 consecutive years, demonstrating a commitment to shareholder returns that complements its strong capital position and share repurchase program mentioned in the article. The company's dividend yield of 2.25% and impressive dividend growth of 19.05% over the last twelve months further emphasize this commitment.
The bank's profitability is evident in its operating income margin of 43.33% for the last twelve months, which supports the article's mention of well-controlled expenses and healthy credit trends. Additionally, JPMorgan's year-to-date price total return of 33.8% and its trading near its 52-week high (98.59% of the high) reflect the market's positive reception of its performance and outlook.
For investors seeking more comprehensive analysis, InvestingPro offers 11 additional tips for JPMorgan Chase & Co., providing deeper insights into the company's financial health and market position.
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