Skip to Content
Stock Analyst Update

Raising Our Fair Value Estimate for JPMorgan

The wide-moat firm had a solid third quarter, and we are increasing our fair value estimate to $114.

Mentioned:

Wide-moat JPMorgan Chase (JPM) reported solid third-quarter results that were well ahead of consensus, with net income of $9.1 billion, or $2.68 per diluted share. The quarter’s return on tangible common equity was 18%, coming down a bit after several one-time items from the last quarter boosted previous results, although 18% is still above the bank’s through-the-cycle goal of 17%. Revenue was up 8% year over year, while expenses were only up 5%, leading to solid operating leverage. The bank continued its share repurchases, with average diluted shares down 52.5 million shares (down 2% compared with the second quarter), and year-over-year EPS growth was 15%. Management gave more details around its expectations for net interest income as the forward curve has changed over the quarter; it now expects managed net interest income of less than $57.5 billion. Given the fact that multiple rate cuts have already occurred, with the possibility for more, this was not surprising. Management also nailed down its expense guidance a bit more, coming in at roughly $65.5 billion, whereas before the guidance was simply for less than $66 billion. After incorporating these and other changes, we are increasing our fair value estimate to $114 per share from $110.

Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.

Eric Compton does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.