Analysis

JPMorgan Chase (JPM)

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On January 25, 2024
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Fundamental analysis

JPMorgan Chase is an American bank that is the largest bank in the world by current market capitalization. The bank is headquartered in New York, but has a corporate address in Delaware. The company was formed in 2000 by the merger of two large banks, Chase Manhattan Company and investment bank JP Morgan & Co. The company has more than $3.7 trillion under management and does business around the world from retail banking to investment banking.Standard banking is thriving because high interest rates have brought additional profit and capital to banks that target ordinary customers.The company was able to make a profit even in the covide, which was comparable to pre-covide times.Net profit in millions of USD

  • 2019 – 57 245
  • 2020 – 54 563
  • 2021 – 52 311
  • 2022 – 66 710
    The Company pays a regular dividend.
    Results
    The ISM for services rose in December (50.2), albeit at a slower pace than in November (52.7). The development in services is positive for JPM stock. The company posted net income of $9.3 billion on sales of $40 billion in the fourth quarter of 2023.
    ROTCE is up 15%.
    Expected earnings are at USD 90 billion, the highest in 5 years and a significant increase from 2022.
    Technical analysis
    PE is 1.11.
    The moving averages crossed in December 2022 after the price bounced off the $100 per share level. Since then, it has reached its 2022 high and has climbed back slightly. The price is now holding between support at $160 and resistance at the highs of $173.
    Furthermore, the supports at $146 and $140 are important as they are based on the long-term historical chart.
    The RSI is in the neutral zone, helped by the pullback from the high price.
    Volume is holding at high levels around 10,000,000 shares traded per day. Liquidity is very high.
    Conclusion
    The status of the largest bank in the world may seem like a potential investment in itself to a long-term investor. What is big hardly goes bust. Although Lehmann Brothers managed to convince us of the exceptions. However, the bank’s earnings in the billions of dollars, which are then redistributed to investors through the dividend, support the thesis of a strong bank and an interesting investment for growth.On the other hand, record expected earnings are already priced in, which is why the price has risen to its previous high, where it has also stalled. However, technical analysis does not give a clear buy signal. On the contrary, if the support at the price of $160 is broken, the price may even fall.
    Sources
    https://seekingalpha.com/symbol/JPM/income-statement
    https://finance.yahoo.com/quote/JPM
    https://en.wikipedia.org/wiki/JPMorgan_Chase
    https://www.jpmorganchase.com/content/dam/jpmc/jpmorgan-chase-and-co/investor-relations/documents/quarterly-earnings/2023/4th-quarter/038c2943-104d-4253-906a-7910c3706763.pdf
    https://www.jpmorganchase.com/ir
    https://simplywall.st/stocks/us/banks/nyse-jpm/jpmorgan-chase
    https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/services/december/