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Is JPMorgan Stock a Buy Post Q4 Earnings & Under Trump 2.0 Policies?
JPMJP MORGAN CHASE(JPM) ZACKS·2025-01-21 14:10

Core Insights - JPMorgan reported strong fourth-quarter and full-year 2024 results, exceeding Zacks Consensus Estimates, driven by robust capital markets and mortgage banking performance, despite challenges from declining net interest income and higher non-interest expenses [1][3][6] Group 1: Financial Performance - JPMorgan's total investment banking fees surged 49% year-over-year to 2.48billion,withequityunderwritingfeesup542.48 billion, with equity underwriting fees up 54% and debt underwriting fees up 56% [3] - Market revenues increased by 21% to 7 billion, with fixed-income markets revenues jumping 50% to 5billionandequitytradingrevenuesrising225 billion and equity trading revenues rising 22% to 2 billion [4] - Net interest income (NII) declined 3% to 23.35billionduetoa100−basispointinterestratecutbytheFederalReserve,alongsidefallingdepositbalancesandmargincompression[6]−Netcharge−offsrose923.35 billion due to a 100-basis point interest rate cut by the Federal Reserve, alongside falling deposit balances and margin compression [6] - Net charge-offs rose 9% to 2.36 billion, and non-performing assets increased by 22% to 9.29billion,indicatingpressureonassetquality[9]Group2:StrategicOutlook−ManagementanticipatesNIItoreachatroughbymid−2025,withprojectionsof9.29 billion, indicating pressure on asset quality [9] Group 2: Strategic Outlook - Management anticipates NII to reach a trough by mid-2025, with projections of 90 billion for 2025, down 2.2% from 2024 [6] - The company is expected to benefit from potential deregulation under the Trump administration, which may enhance investment banking performance and reduce regulatory constraints [12] - JPMorgan is actively pursuing growth through acquisitions and expansion, including increasing its stake in Brazil's C6 Bank and acquiring the failed First Republic Bank [13][14] Group 3: Shareholder Returns - JPMorgan has increased its quarterly dividend by 8.7% to 1.25pershareandannouncedanewsharerepurchaseprogramof1.25 per share and announced a new share repurchase program of 30 billion, with nearly 19billionremainingasofDecember31,2024[17][18]−Thecompanyhasshownaconsistenttrendofdividendincreases,withanannualizedgrowthrateof6.0319 billion remaining as of December 31, 2024 [17][18] - The company has shown a consistent trend of dividend increases, with an annualized growth rate of 6.03% over the last five years [17] Group 4: Market Position and Valuation - JPMorgan's stock has gained 5% since the earnings announcement, reaching a new 52-week high of 260.62 [2] - The stock is currently trading at a forward P/E of 14.63X, slightly above the industry average of 14.33X, indicating a stretched valuation [29] - Despite the premium valuation, JPMorgan's leadership position and strategic expansion plans position it well for future growth [31][32]