Stock of JPMorgan Chase & Co. (NYSE:JPM) — The largest American bank both in terms of revenue and market capitalization – fell Friday, down 5.8% through 11:05 a.m. ET, although the bank reported strong increases in terms of revenue and profits for its first quarter of fiscal 2024.
Heading into the quarter, analysts were expecting earnings per share of $3.82 for JPMorgan on revenue of $38.5 billion. But then the bank reported earnings of $4.63 per share (adjusted for one-time items; net income was $4.44) and revenue of $41.9 billion. a beaten profit by any measure.
Highlights from JPMorgan’s fourth quarter results
CEO Jamie Dimon called his bank’s results “strong,” noting that the difference between adjusted profit and net income came from a $750 million “special assessment” from the Federal Deposit Insurance Corp. (FDIC) to help protect against future losses.
Revenues increased by 9% year-on-year and profits (net) by 8%. The only bad news is that bank depositors are starting to rebel against the ultra-low interest rates that JPMorgan is (again) paying on deposits and moving money from JPMorgan’s savings accounts to higher-paying investments. yield. In the long term, this poses a threat to profits, as JPMorgan may have to increase the interest rates it pays to recover its deposits.
Elsewhere, expenses increased slightly – 13% sequentially – but Dimon reassured investors that the bank’s credit costs and net interest income (down 4% sequentially) are on track. path to “normalization”.
Is JPMorgan Stock a Buy?
Examining this path, Dimon highlighted the risks associated with high inflation, the potential for “quantitative tightening” by the Federal Reserve, as well as multiple geopolitical risks. But overall, he called the market “favorable” and said JPMorgan remained a “pillar of strength.” Matching words with action, the bank continues to repurchase its own shares – totaling $2 billion in share repurchases in the first quarter.
With 12 times earnings and a 2.4% dividend – but only expected to grow earnings 4% annually over the next five years – JPMorgan stock may not be the bank the cheapest in the world. But it seems more of a pillar to me.
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JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Rich Smith has no position in any of the stocks mentioned. The Motley Fool ranks and recommends JPMorgan Chase. The Mad Motley has a disclosure policy.
Why JPMorgan Chase Stock Dropped 6% Today was originally published by The Motley Fool
