JPMorgan Chase’s (JPM) stock underperformed the S&P 500 by 5% during Monday’s Investor Day after disappointing remarks on buybacks from Chief Executive Officer Jamie Dimon, Morgan Stanley said Tuesday in a report.
The stock is expected to rebound on spending from a $17 billion “tech war chest” with net interest income topping expectations “again and again,” the report said.
JPMorgan shares declined Monday after Dimon said that repurchasing shares at over 2x tangible book value per share “is a mistake” and the bank wouldn’t buy back a lot of stock with these prices, Morgan Stanley said
“The market clearly interpreted this to mean no buybacks,” the report said.
Morgan Stanley said reduced its Q3 buyback estimate to $3 billion from $8.4 billion and Q4 to $4 billion from $8.8 billion.
The brokerage also lowered its 2024 earnings per share estimate $0.12 to $16.84 and the 2025 EPS estimate by $0.25 to $16.48, partly on higher expenses.
Morgan Stanley cut its price target on JPMorgan stock to $214 from $216 and maintained an overweight rating.
JPMorgan shares rose 1.1% in recent Tuesday trading.