JPM - JPMorgan: Preferred Shares May Outperform In A Falling Rate Environment
2024-06-28 13:03:15 ET
Summary
- JPMorgan Chase's 4.2% preferred shares have performed in line with the iShares Preferred and Income Securities ETF so far in 2024.
- Going back to June 2021, the series MM preferred shares have underperformed the bank's common stock by 50%, creating a potential buying opportunity.
- The series MM shares offer a 10.55% annual return to my year-end 2026 price target of $21.7/share.
- Cumulative preferred shares distributions represent just 3% of Q1 2024 earnings.
- The uncertain dynamic between FED rate cuts and preferred stock prices is the main risk in the investment case.
Introduction
JPMorgan Chase's 4.2% preferred shares ( JPM.PR.M ) have performed in line with the iShares Preferred and Income Securities ETF ( PFF ) so far in 2024, posting a mid-single digit total return:
JPMorgan 4.2% Preferreds vs PFF ETF in 2024 (Seeking Alpha)
