JP Morgan Chase represents the gold standard in American banking through its diversified business model spanning consumer banking, investment banking, and wealth management. While competitors retreat from physical locations, this bank’s bold expansion of 500 new branches by 2027 reflects management’s confidence in continued growth and commitment to building lasting customer relationships.
A 14-year streak of dividend increases, including the recent 8.7% boost to a $5.00 annual payout, provides reliable income with room for continued growth. Meanwhile the stock trades at a very reasonable 13.5 times the company’s forward earnings forecast.
JP MORGAN CHASE & CO. (New York symbol JPM; www.jpmorganchase.com) is the largest banking firm in the U.S., with total assets of $4.00 trillion as of December 31, 2024.
Despite the ongoing shift by consumers to digital banking platforms, Morgan plans to open 500 new branches in the U.S. by 2027 (it currently has about 4,900 branches). The new locations should help it attract more customers in major cities where it has little presence, such as Boston, Minneapolis, Philadelphia and Washington, D.C.
In the three months ended December 31, 2024, Morgan’s earnings soared 54.1%, to $13.67 billion from $8.87 billion a year earlier. Due to fewer shares outstanding, per-share earnings rose at a faster rate of 58.2%, to $4.11 from $3.04. That topped the consensus estimate of $4.11.
The big earnings gain is partly because the year-earlier quarter included a $2.9 billion payment to the Federal Deposit Insurance Corporation (FDIC) to replenish losses from a fund that helped uninsured depositors of failed regional banks.
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As well, Morgan set aside $2.63 billion to cover potential loan losses. That’s down 4.7% from $2.76 billion a year earlier as lower provisions for business loans offset higher costs for credit card loans.
Revenue in the quarter also improved 9.5%, to $43.74 billion from $39.94 billion, which also beat the consensus forecast of $41.73 billion. The higher revenues are mainly due to rising investment banking and wealth management fee income.
JP Morgan Chase: Attractive valuation offers a buying opportunity
Falling interest rates and investments in new bank branches will probably cut Morgan’s earnings in 2025 by 10% to $17.69 a share. The stock, which is up 20.3% in the past year, trades at an attractive 13.5 times that forecast.
With the October 2024, payment, Morgan increased your quarterly dividend by 8.7%, to $1.25 a share from $1.15. The new annual rate of $5.00 yields 2.0%. Moreover, Morgan
has authorized a new $30 billion share repurchase plan.
Recommendation in Wall Street Stock Forecaster: J.P. Morgan Chase & Co. is a buy.
