JPMorgan Chase & Co. (JPM) posted an excellent Q4 on Wednesday, topping Wall Street’s expectations on both the top and bottom lines. The banking behemoth recorded $43.7 billion in revenue, up 13.4% year-over-year, surpassing estimates by $2.18 billion. Additionally, its EPS landed at $4.81, exceeding projections by a significant $0.71. These results were fueled by robust growth across investment banking, markets, asset management segments, and rigid cost management. More importantly, management’s optimistic outlook for 2025 further bolstered my already bullish view on JPM stock despite its tremendous near-53% rally over the past year.
Stay Ahead of the Market:
- Discover outperforming stocks and invest smarter with Top Smart Score Stocks
- Filter, analyze, and streamline your search for investment opportunities using Tipranks' Stock Screener
A Closer Look at JPM’s Stellar Q4 Results
JPMorgan’s Q4 results showcased yet another outstanding performance, reaffirming its reputation among investors as one of the world’s best-managed banks out there. Net income advanced by 50% year-over-year to $14.0 billion, mainly driven by a substantial rise in managed revenue, which rose to $43.7 billion. Other notable contributors included a 21% year-over-year increase in market revenue and a 46% jump in investment banking fees, reflecting the underlying heightened client activity and broader market enthusiasm.
More specifically, the Consumer and Community Banking segment stayed resilient, as net revenue grew 1% YoY to $18.4 billion. Card Services and Auto revenue saw a notable 14% growth, supported by higher revolving balances and increased credit card spending. Meanwhile, the Commercial and Investment Bank segment delivered an 18% year-over-year revenue increase, powered by growth in fixed-income and equity markets. This trend was also evident in the Asset and Wealth Management unit, which saw a 13% revenue uptick, buoyed by record-high management fees and $76 billion in long-term net inflows during the quarter.
Besides the robust top-line performance across JPMorgan’s key segments, careful expense control played a critical role in outstanding bottom-line numbers. Adjusted expenses advanced by just 5%, primarily due to higher compensation and technology investments, while the bank maintained an impressive return on tangible common equity of 21%. I believe that JPMorgan’s ability to balance double-digit growth across the board while managing costs effectively is truly impressive and pretty much highlights why it is one of the (if not the) most beloved banks on Wall Street.
A Bullish 2025 Outlook
JPMorgan wrapped up Fiscal 2024 on a high note. More importantly, however, its Fiscal 2025 outlook is equally promising. Management expects ~$90 billion in net interest income (excluding markets) despite an anticipated rate cut later in the year. I think this forecast, hence, acts as a flex of the bank’s diversified revenue streams and balance sheet strength, which is likely to offset potential margin pressures. A lasting focus on card revolve growth and higher deposit balances further solidifies strong earnings expectations. I am particularly optimistic about the asset management business, whose $4.0 trillion in AUM is poised to keep generating excellent cash flows, especially in today’s spirited equities environment.
Attractive Valuation Despite Recent Rally
Now, despite JPMorgan shares rallying by about 53% over the past year, I believe that the banking giant remains attractively valued. The stock is currently trading at about 14x Wall Street’s FY2025 EPS estimate of $18.36. However, since analysts have yet to update their estimates, and since JPMorgan’s outlook on FY2025’s net interest income exceeded consensus, it’s quite likely that consensus estimates will rise from here. In turn, this should allow the stock’s forward multiple to come down against its current price levels, resulting in an even more attractive valuation.
Overall, I see any forward P/E below 14x to be quite compelling for JPM stock, given the bank’s consistent ability to grow earnings and book value while maintaining a fortress balance sheet. For context, its 2024 ROTCE of 22% and a tangible book value per share growth of 13% are truly remarkable and very hard for most banks to come close to.
Is JPM Stock a Buy?
Wall Street remains optimistic on JPM stock’s investment case. While most analysts have yet to issue post-earnings targets, the stock features a Moderate Buy. In particular, JPM has received ten Buys, six Holds, and one Sell over the past three months. The average JPM stock forecast of $265 implies a 5.01% upside potential from current levels.
If you’re unsure which analyst to trust if trading or investing in JPM stock, Scott Siefers of Piper Sandler (PIPR) stands out as the most accurate and profitable over the past 12 months. His recommendations have delivered an average return of 32.16% per rating, with a perfect 100% success rate.
Conclusion
Summing up, JPMorgan’s excellent Q4 results were driven by broad-based revenue growth and expense control. Along with management’s vibrant outlook, it reaffirmed its status as a banking powerhouse. The bank’s capacity to deliver growth across investment banking, consumer segments, and asset management while maintaining an impressive bottom line once again demonstrated Jamie Dimon’s top-tier leadership. Now, factor in JPM’s attractive valuation and the strong likelihood of upward re-ratings from analysts, and a compelling bullish case emerges. I think this will hold true despite its extended rally over the past year.
