JPM - JPMorgan Chase Will Keep Looking For Direction

2024-06-26 11:13:23 ET

Summary

• JPMorgan Chase faces mixed signals with concerns about profitability uncertainty and overvaluation.
• There are certainly positive factors here, including its strong net interest income growth and optimistic outlook.
• However, I see limited upside potential in the next year due to uncertainties related to rates, operating expenses, and capital return programs.

JPM stock faces mixed signal

I last covered JPMorgan Chase ( JPM ) about three months ago, urging investors to take advantage of the recent price rally and take some profit (see the next chart below). The stock price has indeed moved largely sideways since then, rising about 1.6% (compared to a 4.8% advancement from the broader market). The specific factors that went into my thesis are recapped below:

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 no margin of safety.

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