JPMorgan Chase & Co JPM

JPMorgan Investor Day: CEO Dimon Pushes Back Against Buying More Stock at Current Prices

Wide-moat-rated JPMorgan's investor day highlighted the bank's current competitive strengths, market share gains, and areas for future investment. For us, the highlight was CEO Jamie Dimon's responses on additional share buybacks. Analysts repeatedly questioned Dimon about more share repurchases given that the bank is currently sitting on about $54 billion of excess capital. The bank has enough firepower to substantially increase buybacks even after accounting for management's discretionary capital buffer, uncertainty in the stress capital buffer, and the most aggressive assumptions on the Basel III endgame proposal. However, Dimon categorically rejected analyst requests for more buybacks and said that the bank is not going to increase buybacks at current prices. He added, "buying back stock as a financial company greatly in excess of 2 times tangible book is a mistake." We are maintaining our $168 per share fair value estimate for the bank.