JPMorgan Chase: Steady Q4 And Well-Prepared For 2023

Summary:

  • JPMorgan Chase & Co. delivered another steady quarter, with profits up year-on-year and a strong 20% Return on Tangible Common Equity.
  • Strong Net Interest Income, driven by both higher rates and loan growth, more than offset a modest fall in Non-Interest Revenues.
  • JPMorgan now has more than enough credit reserves for a mild recession, and will likely remain profitable even in a bad one.
  • Buybacks are resuming after JPMorgan hit a capital ratio target early. The dividend represents a 2.8% yield now and should rise further.
  • With JPMorgan Chase & Co. shares at $142.94, we expect a total return of 40% (12.5% annualized) by end of 2025. Buy.

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Drew Angerer

Introduction: Why is JPM Stock Up?

JPMorgan Chase & Co. (NYSE:JPM) reported their Q4 2022 results this morning (January 13). JPM shares initially fell by as much as 2.8% at the open, but are now up 2.4% (as of 13:10

Librarian Capital JPM Rating History vs. Share Price (Last 1 Year)

Librarian Capital JPM Rating History vs. Share Price (Last 1 Year)

Source: Seeking Alpha (13-Jan-23).

JPM ROTCE vs. Medium-Term Outlook (Since 2004)

JPM ROTCE vs. Medium-Term Outlook (Since 2004)

Source: JPM results supplements.

JPM Results Headlines (Managed Basis) (Q4 2022 vs. Prior Periods)

JPM Results Headlines (Managed Basis) (Q4 2022 vs. Prior Periods)

Source: JPM results supplement (Q4 2022).

NB2. Q4 2022 included $914m of gain from Visa share sale and $874m of net investment securities losses in Corporate.

JPM Earnings, Provisions & Pre-Tax Profit by Quarter (Since Q4 2019)

JPM Earnings, Provisions & Pre-Tax Profit by Quarter (Since Q4 2019)

Source: JPM results supplements.

NB. Figures on managed basis.

JPM Results Headlines (Managed Basis) (2022 vs. Prior Year)

JPM Results Headlines (Managed Basis) (2022 vs. Prior Year)

Source: JPM results supplement (Q4 2022).

JPM Interest Revenue, Loans & Rates (Q4 2022 vs. Prior Periods)

JPM Interest Revenue, Loans & Rates (Q4 2022 vs. Prior Periods)

Source: JPM results supplement (Q4 2022).

JPM CIB Revenues by Type (Q4 2022 vs. Prior Periods)

JPM CIB Revenues by Type (Q4 2022 vs. Prior Periods)

Source: JPM results presentations.

JPM Provision for Credit Losses (Q3 2022 vs. Prior Periods)

JPM Provision for Credit Losses (Q3 2022 vs. Prior Periods)

Source: JPM results presentation (Q4 2022).

JPM 2023 Outlook

JPM 2023 Outlook

Source: JPM results presentation (Q4 2022).

Illustrative JPM 2022 Forecasts

Illustrative JPM 2022 Forecasts

Source: Librarian Capital estimates.

Illustrative JPM Return Forecasts

Illustrative JPM Return Forecasts

Source: Librarian Capital estimates.


Disclosure: I/we have a beneficial long position in the shares of BAC either through stock ownership, options, or other derivatives. 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.


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