JPMorgan's stock underperforms and grows more attractive, one analyst says

By Steve Gelsi

KBW's David Konrad hikes price target and profit estimate after the bank's boosts its net interest income view

JPMorgan Chase & Co.'s stock has become more attractive after recently underperforming, despite a more bullish outlook from the megabank, KBW analyst David Konrad said in a research note.

Konrad boosted his target price for JPMorgan Chase (JPM) to $209 a share from $203 a share, while keeping his market perform rating.

He also increased his full-year 2024 profit estimate for the bank by 70 cents a share to $16.62 a share, according to a research note from earlier this week. The FactSet consensus estimate for the bank's 2024 estimate is $16.64 a share.

Konrad is now more positive on the stock after the bank hiked its outlook for 2024 net interest income outlook by $1 billion to $91 billion at its investor day on Monday.

Investors appeared to brush aside the bullish move and instead focused on comments by JPMorgan Chase Chief Executive Jamie Dimon that he remains cautious about buying back the company's stock at current price levels.

"When you're already good it is hard to impress," Konrad said in a research note published on Tuesday.

Konrad said he's currently "more constructive" on JPMorgan stock, which means the shares are becoming more attractive for investors, in his view.

Since JPMorgan reported first-quarter results on April 12, the stock has underperformed its peers by 10.6%, Konrad noted.

The bank's stock is now trading at roughly a 6% premium, which is close to its historical levels, he said.

Other highlights from JPMorgan's investor day include Dimon's comment that he may retire sooner than expected, but no other details were provided.

The bank's board of directors in 2021 awarded Dimon a $50 million bonus if he stays in the job until 2026.

JPMorgan remains "cautiously optimistic" about capital-markets activity due to a better environment for equities and continued strength in fixed-income activity, Konrad said.

The bank's asset and wealth-management unit continues to ramp up, with plans to hire more people to grow its global private bank.

JPMorgan Chase's stock was down by 0.1% in premarket trading on Wednesday. The stock is up about 3.3% in the past month, compared to a 3.7% rise by the KBW Nasdaq Bank index BKX.

-Steve Gelsi

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05-22-24 0842ET

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