CFRA Keeps Buy Rating On Shares Of Jpmorgan Chase & Co.

Despite no lift from investment banking fee income, JPM is executing across most businesses with 18% ROE. We keep our $175 target, a forward P/E of 11x, below the three-year historic average at 12.3x. We increase our 2023 EPS estimate by $0.75 to $17.00 and 2024’s by $0.40 to $15.95. Loan growth remains critical to net interest income (NII) and non-interest income in 2023-2024, assuming economic growth. NII rose 30% Y/Y, with a rise in interest rate spread to 2.00% vs. 1.79% Y/Y (1.97% Q/Q) and total loans +17% Y/Y, while deposit-related fees were -4%. Consumer net revenue was +29%, with banking/wealth management +43%, home lending +36%, and card services and auto +7%. Commercial banking revenue was +32%, with middle markets +37% (gaining market share), corporate client banking +15%, and commercial real estate +48%. Investment banking fees were -2% Y/Y, with M&A advisory -10%, equity underwriting -6%, and debt underwriting +8%. Fixed income trading was +1% Y/Y, equity markets -10%, and security services +9%.

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