JPMorgan Chase JPM
What does JPMorgan Chase do?
JPMorgan Chase is the largest bank in the US and a globally active financial group. Its business is divided into three segments: Consumer & Community Banking serves retail customers and small businesses with accounts, loans, mortgages, credit cards and digital banking services. The Commercial & Investment Bank covers investment banking, trading in securities and currencies, corporate lending, payments and securities services.
The Asset & Wealth Management division manages assets for institutional and private clients and earns mainly fee income. Sources of income are net interest income from lending and deposit-taking, commissions and fees, and trading revenue. Competitively, the group benefits from its size, a broad deposit base, a strong brand and the combination of retail, corporate and capital markets businesses. Competitors include other large US banks as well as international investment banks and asset managers.
Score profile
Rank vs. Financial Services (272 companies). 10 = top of the group, 5 = middle. Calculated from the metrics below, without AI.
Metrics compared with the industry
On profitability and quality, JPMorgan Chase ranks in the middle in the group Financial Services (5.9/10). On growth, the company ranks in the middle in the group Financial Services (5.7/10). On valuation (higher = cheaper), the stock ranks below average in the group Financial Services (3.2/10). On financial strength, JPMorgan Chase ranks above average in the group Financial Services (7.4/10).
| Metric | Stock | Group median | Ranking |
|---|---|---|---|
| Forward P/E | 13.4x | 10.9x | better than 31 % |
| Trailing P/E | 14.4x | 12.8x | better than 37 % |
| PEG ratio | 1.4x | 1.4x | better than 49 % |
| Price/sales | 4.8x | 3.4x | better than 19 % |
| Price/book | 2.6x | 1.7x | better than 27 % |
| Revenue growth | 10.2% | 6.9% | better than 61 % |
| Earnings growth | 9.9% | 8.6% | better than 53 % |
| Gross margin | 0.0% | 26.2% | better than 20 % |
| Operating margin | 42.6% | 34.9% | better than 67 % |
| Net margin | 34.6% | 23.3% | better than 80 % |
| Return on equity | 18.0% | 13.1% | better than 69 % |
| Debt/equity | 0.0% | 17.4% | better than 80 % |
| Free cash flow yield | 0.0% | 0.0% | better than 33 % |
| Dividend yield | 1.9% | 2.4% | – |
| Payout ratio | 25.8% | 31.0% | – |
| Beta | 1.02 | 0.87 | – |
Valuation: what is JPMorgan Chase worth?
Two valuation approaches – a discounted cash flow model and a valuation at the industry’s median multiples – give JPMorgan Chase a model range of 219.21 USD to 278.07 USD per share.
23 analysts, average rating “Buy”, average price target 373.48 USD (+9.2%).
The full DCF matrix, the reverse DCF (what growth the price implies) and scenarios are part of the Pro analysis.
What the business depends on
- Net interest income depends on the interest rate level, loan volume, and the size and composition of customer deposits.
- Investment banking and trading revenue follow capital market activity, for example in issuance, mergers and acquisitions.
- Fees from asset management, payments and the card business create broadly diversified income that is less dependent on interest rates.
Risks
- An economic downturn can increase loan defaults and force higher loan loss provisions in retail and corporate banking.
- Strict regulation and capital requirements limit room for distributions, growth and the business model.
- Market volatility, interest rate changes, and cyber and operational risks can weigh on income and cause reputational damage.
What to look for with JPMorgan Chase
Return on tangible equity shows how profitably the bank uses its capital and is readily comparable across banks.