JPMorgan Chase is the IBD Stock Of The Day for Monday. The Dow Jones financial giant is trading near record highs and just below a buy point after its mid-October earnings beat.
JPMorgan Chase on Oct. 11 reported Q3 earnings of $4.37 per share, handily beating FactSet expectations for $3.99 per share. Reported net revenue rose roughly 7% to $42.7 billion, which cleared estimates for $41.4 billion.
JPMorgan saw assets under management increase by 23% to $3.9 trillion. Net interest income rose 3% to $23.5 billion. Average deposits were down 8% from last year, while average loans rose 1% from 2023.
Investment banking revenue increased 29%, driven by a 31% jump in investment banking fees. Banking and wealth management revenue fell 11% due to lower interest income on deposits and lower deposit balances. However, home lending revenue rose 3%, while card services and auto revenue increased 11%.
JPMorgan increased its provision for credit losses to $3.1 billion, from $1.38 billion for the same quarter last year.
The bank guided 2024 net interest income around $92.5 billion, with an implied $22.9 billion in net interest income for Q4. FactSet analysts expect $92.2 billion in NII for the year, revised up from the previous outlook for $91 billion ahead of earnings. Analysts predict JPMorgan will generate $22.83 billion in net interest income for the fourth quarter.
Analyst Outlooks
A number of firms lifted their price target after earnings, with RBC Capital noting that JPMorgan continues to deliver best-in-class results, The Fly reported.
JPMorgan's diversified business model and billions in investments over the past decade have resulted in a fortress balance sheet and highly profitable banking model, RBC Capital wrote. RBC raised its price target on JPM stock to 230 from 211 and kept an outperform rating on the shares.
Meanwhile, Kenneth Leon, director of equity research at CFRA Research, forecasts that a strong economy will provide room for further growth, even if interest rates fall.
"We believe a healthy U.S. economy will drive loan volume growth that will partly offset rate declines. Also, non-NII revenue from the Asset and Wealth Management and Corporate and Investment Banking units should benefit from lower rates," Leon wrote in a post-earnings note.
CFRA Research maintained a buy rating on JPM stock with a 12-month price target of 230.
JPMorgan Stock Action
JPM stock is trading below a 225.48 buy point for a cup base — near its record high of 226.75 from Oct. 29.
JPMorgan stock dipped below its 10-day line last week and on Monday eased to test its 21-day exponential moving average.
The financial giant tested the buy point a few times since reporting earnings but hasn't been able to score a decisive breakout.
JPMorgan stock is up more than 30% in 2024.
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