JPMorgan: This Banking Giant Has A Very Decent Upside Potential

Summary:

  • Thesis Update: JPMorgan’s stock has risen by 15.57% since my previous article. Now, my projected fair price is $237.41, representing a 20.7% upside from the current price.
  • Growth Plan: Expansion through 500 new branches poses both opportunities and risks in capturing deposits.
  • Market Share: JPMorgan holds 13.80% of total deposits in the US, indicating room for growth in the banking sector.
  • Rating: JPM remains a strong buy because of its strong financial condition and the potential return that can be released if my fair price estimate is achieved.

Jeffrey Epstein Accuser Sues JPMorgan Chase

Michael M. Santiago

Thesis

In my previous article (released in Q3 2023, which were released on October 13) that covered JPMorgan Chase & Co. (NYSE:JPM), I assigned a strong buy rating citing that its estimated fair price

Table Of Assumptions
(Current data)
Equity Value 566,340.00
Debt Value 731,372.00
Cost of Debt 2.16%
Tax Rate 24.34%
10y Treasury 4.222%
Beta 1.10
Market Return 10.50%
Cost of Equity 11.13%
Net Income 49,552.00
Interest 15,803.00
Tax 12,060.00
D&A 7,512.00
EBITDA 84,927.00
D&A Margin 5.14%
Interest Expense Margin 10.82%
Revenue 146,009.0

CAPM
Risk-Free Rate 4.222%
Beta 1.1
Market Risk Premium 6.228%
Required Rate of Return 11.073%

Consumer & Community Banking Corporate & Investment Bank Commercial Banking Asset & Wealth Management Corporate Total
2023 70,148.0 48,807.0 15,546.0 19,827.0 8,033.0 162,361.0
2024 72,013.0 49,490.3 15,959.4 20,848.1 2,277.0 160,587.8
2025 73,878.0 50,183.2 16,372.8 21,921.8 2,277.0 164,632.7
2026 75,743.0 50,885.7 16,786.1 23,050.7 2,277.0 168,742.6
2027 72,101.5 47,186.3 15,979.1 21,374.9 2,277.0 158,918.9
2028 73,139.7 47,846.9 16,209.2 22,475.8 2,277.0 161,948.7
2029 74,193.0 48,516.8 16,442.7 23,633.3 2,277.0 165,062.7
Growth Rate % 1.44% 1.40% 1.44% 5.15%

Average Net Income Margin Estimates My Net income Margin Estimates %
2024 28.25% 29.29%
2025 28.35% 33.94%
2026 29.81% 31.47%
2027 26.32% 36.12%
2028 25.29% 31.47%
2029 24.30% 33.94%


Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in JPM over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.


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