JPMorgan Chase & Co. Stock Can Hit $300 This Year
JPMorgan Chase & Co’s (NYSE: JPM) stock has been rapidly rising and is on track to continue the trend in 2025. The Q4 2024 results were not only strong, but the conditions driving bank results remain in place and are likely to remain so through year’s end. Among the driving forces are higher-for-longer interest rates and the diminishing outlook for Fed rate cuts this year. At best, the Fed will deliver a single 25 basis point cut by year’s end, keeping the average rate above 4% through year’s end, a good 50 basis points or more above the forecasts at the start of the reporting period. The takeaway is that higher interest rates drive robust interest income, and the underlying banking businesses are also strong.
JPMorgan’s Robust Quarter Underpinned by Market and Asset Management Business
JPMorgan Chase & Co. had a solid quarter, outperforming the analysts' consensus reported by MarketBeat by wide margins due to strength in all three operating segments. The $43.78 billion in net revenue is up 13.4% and outpaced the consensus by 520 basis points. The investment banking and asset management businesses were strongest, with fees up 49% and assets under management rising by 18%. Other metrics include a 21% increase in market revenue and increasing deposits. The consumer side saw deposits fall, but the decline is offset by a 14% increase in investment assets. CEO Jamie Dimon says consumer spending remains strong, as evidenced by the 1% increase in loans and 8% increase in card volume.
The provisions for credit losses raised a red flag but not one that altered the outlook for the year. The company logged a net increase in credit loss provision, including a $2.4 billion net charge-off, up nearly 10% compared to the prior year. This signifies consumer cracking, but the increase aligns with seasonal trends, charge-offs remain low, and the total provision declined. Charge-offs may remain elevated in 2025 but are offset by strong labor markets, rising wages, and improving consumer sentiment and are unlikely to be a significant impairment. Regarding the bottom line, GAAP earnings grew 60% YOY and outpaced the consensus by 1700 basis points.
JPMorgan Guidance Fuels Positive Analysts Trends
The guidance for 2025 is equally strong. The company forecasted net investment income to reach $94 billion or nearly 300 basis points above the consensus. The NII guidance is enough to improve the outlook, and strength can be expected in all segments.
The news will likely spur analysts to increase their revenue and earnings targets and extend the positive stock price revision trend. As it is, the consensus assumes the stock is fairly valued near the pre-release level, but the revision trend is what counts. The latest estimates have this stock trading at $300 or roughly 35% upside.
Capital return will be among the drivers for this stock in 2025. The company’s financial position is as strong as ever, with tier-one capital ratios above minimum requirements and its cash position flush.
Balance sheet highlights include an 11% increase in book value and a 17% return on equity.
The bottom line is that the healthy dividend will likely increase by another high-single-digit amount in 2025, and repurchases will be significant.
Share repurchases netted $4 billion in shares or about 0.5% of the stock during the quarter and are expected to continue at a similar pace this year.
JPMorgan Chase Stock Is in a Secular Updraft
JPMorgan Chase’s stock price has been in a secular-grade updraft for over two years as its organic growth was compounded and accelerated by the acquisition of assets in 2023. The stock price is up more than 140% since hitting bottom in 2022 and can quickly rise by another double to triple-digit amount. The technical signal is strong; the market is forming a bullish flag pattern, signaling a trend continuation this year. The simple targets are based on the magnitude of the flag pole; the only question is the flag pole’s base. Using the $175 level as a starting point, this stock can advance by another $75, assuming new highs are set.
