JPMorgan Chase’s (JPM) CEO, Jamie Dimon, says private credit may have peaked and that risks in private markets around the world remain high.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
- Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week.
In discussing the bank’s latest financial results, Dimon warned that lending via private credit might be set for a decline even as he refused to rule out JPMorgan Chase getting back into the murky sector. “You may have seen peak private credit,” said Dimon on JPMorgan’s earnings call with analysts and media.
The CEO stressed that private-credit firms are accepting relatively little return in exchange for taking on a lot of risk, and that the industry has grown significantly in recent years. Private credit is “one place that people worry has unknown leverage,” he added.
Private credit, also known as private debt, refers to loans that are made by non-bank lenders, such as private equity firms or business development companies with little or no oversight, or disclosure.
Wading Back into the Market
Despite raising concerns, Dimon refused to rule out JPMorgan participating in private credit markets now or in the future. When pressed by reporters on the earnings call, the CEO said that while buying a private lender wasn’t a priority, he’d consider it “for the right people at the right price.”
JPMorgan Chase exited the private credit market in 2015 after determining it was too risky. However, earlier this year, the world’s biggest commercial bank announced that it was increasing its allocation to private lending to $50 billion from $10 billion previously. That increase came as Dimon said he was worried that JPMorgan was losing out on private credit business to rivals.
Is JPM Stock a Buy?
The stock of JPMorgan Chase has a consensus Moderate Buy rating among 18 Wall Street analysts. That rating is based on 12 Buy, four Hold, and two Sell recommendations issued in the last three months. The average JPM price target of $303.06 implies 6.46% upside from current levels.
