Stock (Symbol) |
JP Morgan (JPM) |
Stock Price |
$116 |
Sector |
| Financial |
Data is as of |
| February 15, 2018 |
Expected to Report |
| Apr 12 |
Company Description |
 JPMorgan Chase & Co. is a financial holding company. The Company is engaged in investment banking, financial services. It operates in four segments, as well as a Corporate segment. The Consumer & Community Banking segment serves consumers and businesses through personal service at bank branches and through automatic teller machines, online, mobile and telephone banking. The Corporate & Investment Bank segment, comprising Banking and Markets & Investor Services, offers investment banking, market-making, prime brokerage, and treasury and securities products and services to corporations, investors, financial institutions, and government and municipal entities. The Commercial Banking segment provides financial solutions, including lending, treasury services, investment banking and asset management. The Asset Management segment comprises investment and wealth management. Source: Thomson Financial |
Sharek’s Take |
 JP Morgan (JPM) had a fabulous 2017 — and I feel the trend higher will continue as higher interest rates and lower taxes have caused profit estimates to surge. The Fed is expected to raise rates three to four times in 2018. Just since last qtr JP Morgan’s 2018’s profit estimates have ballooned from $7.64 to $8.82. Since the company made $6.98 last year, that takes the expected growth rate from 9% to 26%! Most of that boost is via forecasting a 19% tax rate for 2018. In addition, the stock sells for a modest 13x profits. JP Morgan Chase has the following divisions:
Higher rates are helping JPM make money off loans, but I envision a more dynamic company a decade from now. First, crypto-currency is raking in money. There’s got to be a way Jamie Dimon can create his own Bitcoin — backed by the assets of JP Morgan Chase. Or they can create and/or manage crypto funds and collect fees. Second, the company is looking into becoming a bigger player in ETFs. ETFS have have been BlackRock’s road to strong growth. Profits are expected to climb 32% the next 4 qtrs, and this stock looks to climb higher. But this is a value investment for m as the Estimated Long Term Growth Rate is just 9% a year. Tack on the 2% yield and the estimated total return is 11% a year. That’s not enough for the Growth Portfolio (15% min). But this is a great fit for the Conservative Growth Portfolio and will purchase the stock in investors accounts today. |
One Year Chart |
 Qtrly growth was excellend a year-ago, then started to slow. Now with the boost in qtrly profit Estimates the future looks great. Profits are expected to climb 40%, 34%, 28%, and 24% the next 4 qtrs. And with a P/E of just 13 this stock is inexpensive as well. |
Fair Value |
 My Fair Value is 14x earnings. I wish to point out that although JPM has been growing rapidly, it probably won’t get a P/E higher than 15-17. Thus this stock has decent upside in this table. JPM has beaten ana;yst profit estimates the last 4 qtrs. |
Bottom Line |
 JP Morgan is the finest large bank available to investors, but the stock isn’t as safe as it seems as it has a Beta of 1.16. Still, with profits expected to soar 26% in 2018 and the stock having a 13 P/E I feel there’s little downside risk here. There’s good growth now with rates going higher, and in the future I envision JP Morgan Chase being a bigger player in managing money around the world. JPM will be added to the Conservative Portfolio and will rank 8th in the Power Rankings. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio 8 of 32 |
