WFC - JPMorgan Chase: Time To Take Some Profit

2024-03-25 12:05:52 ET

Summary

• JPMorgan Chase & Co. had a strong showing in earnings in 2023.
• The article argues that many of the catalysts that drove JPMorgan Chase's earnings growth in 2023 are unlikely to continue into 2024, leading to concerns of over-earning and a potential decline in profitability.
• At the same time, the stock may be fully valued or even overvalued, leaving margin of safety.

Thesis

JPMorgan Chase & Co. (JPM) had a strong showing in earnings in 2023. Fourth-quarter profits ( released in Jan 2024) reached $3.78 per share, a healthy 6% increase compared to $3.57 per share in 2022. For 2023 as a whole, JPM’s bottom line surged almost 33% YoY, to $16.05 a share, versus the prior-year figure of $12.09. Thanks to such large earnings boosts, the stock price now hovers around a record high of ~$195 (see the chart below)....

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