IBD Stock Analysis
- Flat base with 205.88 buy points, solid support at the 10-week moving average.
Ranking of industry groups
Emerging pattern
Flat base
* Not real-time data. All data shown was captured at 1:38PM EDT on 07/01/2024.
JPMorgan Chase stock is the IBD stock of the day after testing a buy point and hitting record highs. JPMorgan Chase (JPM) increased share buybacks and dividend payments on Friday after raising its forecast for net interest income in May.
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The Dow Jones giant dominates the U.S. banking sector, with operations in investment and commercial banking, credit cards, retail banking and asset and wealth management. Analysts expect JPMorgan Chase to continue to benefit from higher interest rates for an extended period, but growth is slowing.
Including financial stocks, Interactive brokers (IBKR), KKR (KKR), Toast (To stand Axos Financial (AX) earns a spot on the IBD 50 list of best growth stocks.
JPMorgan Chase shares flirt with a buy point
Shares of the money-center bank rose 1.6% on the stock market today. The move briefly lifted JPMorgan Chase shares above a 205.88 buy point from a flat base, according to MarketSurge pattern recognition. That helped JPM stock score an all-time intraday high on Monday, though it closed just below its entry.
The bank stock is above all short- and long-term moving averages, a positive sign. However, the relative strength line remains below the consolidation peak. It would be a healthy sign if the RS line catches up with the stock as it tries to break out. That strength indicator has risen sharply over the past year, a sign of JPMorgan’s outperformance relative to the S&P 500.
Passes Fed stress test, increases stock buybacks and dividends
In terms of key IBD ratings, JPM shares sport an SMR rating of A, reflecting superior revenue growth, margins and return on equity. Furthermore, shares of the Dow Jones banking giant have an up/down volume ratio of 1.4, a sign of healthy institutional demand.
Much of the upside came on June 28, when JPMorgan said it would raise its quarterly dividend to $1.25 from $1.15. The board also authorized a $30 billion share buyback. On Wednesday, the Federal Reserve announced that the bank had passed its annual Fed stress test, showing it is well-positioned to weather a potential recession.
Like JPMorgan Chase, Morgan Stanley (MS) says it will increase both share buybacks and dividend payments.
Last week, markets reacted positively to former President Donald Trump’s convincing victory in the debate over President Joe Biden, ahead of the November presidential election. Strategists expect financial stocks to benefit from a possible second term for Trump.
During an investor day on May 20, JPMorgan raised its forecast for net interest income in 2024 to $91 billion, from a previous forecast of $89 billion in April.
JPMorgan shares earn a solid 88 Relative Strength Rating out of a best-possible 99, down slightly from 89 four weeks ago. The 88 RS Rating means JPMorgan Chase shares have outperformed 88% of all stocks in IBD’s database over the past year.
So far this year, JPMorgan Chase shares have risen more than 21%, thanks to a first-quarter rally.
JPMorgan Chase profit growth slows
The #1 US bank by assets has a strong Composite Rating of 93 out of a possible 99. The Composite Rating combines several technical and fundamental metrics into one easy-to-read score.
JPM shares have an EPS rating of 88, thanks to earnings growth in 2023 after a decline in 2022.
On April 12, JPMorgan Chase beat first-quarter profit estimates as revenue rose 9%. However, revenue growth slowed for the third straight quarter and the company’s guidance disappointed some investors.
FactSet shows JPMorgan Chase’s earnings per share rebounded 34% in 2023 after a 21% decline in 2022.
Analysts expect the bank’s quarterly earnings per share to be volatile, rising 2.5% for all of 2024 before slowing to a 0.4% increase in 2025. Revenue is expected to rise 5.5% and 0.8% this year and next, respectively.
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