2023-07-12 09:30:11 ET
- Citi analyst Keith Horowitz downgraded JPMorgan Chase ( NYSE: JPM ) stock to Neutral from Buy on Tuesday on the belief that its premium valuation has returned, trading at around two times tangible book value and ~10.5 times 2024 EPS.
- Also, "with the stock trading at the lowest implied cost of equity of our coverage and our estimates below to in-line with consensus, we see a lot being priced in and leaving us little left to play for," the sell-side analyst wrote in a note.
- Although he sees upside to consensus net interest income estimates in 2023-2024, "we believe that is largely reflected in the stock; and despite a strong capital position there are uncertainties in the outlook as we await Basel 3 endgame."
- Investors seemed unbothered by the downgrade, with JPM edging up 0.4% in premarket trading. The Neutral rating, meantime, aligns with the SA Quant system rating of Hold, and disagrees with the average SA analyst rating and the average Wall Street analyst rating, both at Buy.
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JPMorgan cut to Neutral at Citi in wake of premium valuation