JPMorgan Earnings Preview: Flat Growth Expected Despite Solid Fundamentals

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Citigroup Inc,Jpmorgan Chase & Co

Stocks Analysis by Brian Gilmartin covering: S&P 500, Citigroup Inc, JPMorgan Chase & Co. Read Brian Gilmartin's latest article on Investing.com

) it’s interesting to see the difference in the two banking giants within the same sector: Citi has had little to no earnings growth, the valuation is all about the discount to book value and tangible book value, the historical ROE on Citi is mid-single-digits, well below its peers, the stock has been stuck in the doldrums for years, and has greatly underperformed theJPM on the other hand has been the mark of organizational stability, has had the top CEO in the banking business the last 10 – 15...

JPM recently boosted their dividend and looks like it is buying back stock again, so that could help Q1 ’24. Expect credit quality to be solid, . Jamie’s pretty conservative with loan-loss reserves and he’s actually been beefing up the bank’s reserves during 2022 and 2023, so that may taper this year. Jamie did say in 2022, if the national unemployment rate reaches 6%, JPM may need to add $4 – $6 in LLR’s for that type of economy. If nothing else, the pace of LLR’s can be slowed given the remarkable strength in the US economy.

Ultimately, I think JPM can earn $20 in EPS in the forward years but the stock rarely looks good on traditional bank valuation metrics.

 

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