This JPM Stock Forecast article was written by Levi Fu – Financial Analyst at I Know First.

Highlights

• JPMorgan Chase’s net income grew from $36.4 billion in 2019 to $49.6 billion in 2023, reflecting a strong 7.9% annual growth rate.
• The acquisition of First Republic Bank in 2023 further strengthened JPMorgan’s retail and commercial banking presence.
• The average price target is approximately $220,as a potential sideways consolidation phase is expected.

JPM Stock forecast: Overview

J.P. Morgan is a global financial leader, serving corporations, governments, and institutions across more than 100 countries. It offers services in investment banking, asset management, and treasury management, with expertise in areas such as capital raising, risk management, and advisory solutions. The firm leverages its global presence and industry knowledge to deliver comprehensive financial strategies and innovative solutions​.

JPM overall financial trends for the past 5 years

Over the past five years, JPMorgan Chase has seen strong growth in its net income. From 2019 to 2023, JPM’s net income grew from $36.4 billion to $49.6 billion, with an annual growth rate of about 7.9%. This steady increase is mainly due to the rise in net interest income and lower Selling, General & Administrative (SG&A) expenses as a percentage of total revenue.

A big part of JPM’s profit growth came from higher net interest income, which is the difference between what the bank earns from loans and investments and what it pays on deposits and borrowings. As a percentage of total revenue, net interest income increased from 52.0% in 2019 to 61.3% in 2023. This was largely driven by higher interest income on loans, which jumped from $84.0 billion in 2019 to $170.6 billion in 2023, boosted by more loans and rising interest rates. Even though interest costs also went up, JPM managed to keep its margins healthy.

JPMorgan Chase also did a great job of keeping its operational costs in check. SG&A expenses as a percentage of revenue dropped from 25.7% in 2019 to 20.1% in 2023. This was achieved by making processes more efficient, using technology, and tightly managing its budget and resources.

The bank’s provision for loan losses also affected its financial results. In 2020, the provision spiked to $17.5 billion, or 17.1% of revenue, due to concerns about potential credit losses. By 2021, conditions improved, and JPM released $9.3 billion in reserves as fewer loans defaulted than expected. Since 2022, the provision has stabilized, positively impacting the bank’s earnings.

JPM’s non-interest expenses, such as salaries and other operating costs, have shown improvement. The expense ratio, which measures expenses as a percentage of revenue, fell from 59.0% in 2019 to 57.1% in 2023, and to 55.1% in the last twelve months of 2024. Employee costs have stayed relatively stable, showing effective management of staffing expenses.

JPM Segment Performance

JPMorgan Chase & Co. has maintained strong financial performance across its key business segments.

Consumer & Community Banking (CCB)

JPMorgan’s Consumer & Community Banking segment serves individuals and small businesses through various channels, including branches, ATMs, online platforms, and phone banking. Key services include checking and savings accounts, loans, credit cards, and auto financing.

In the second quarter of 2024, the consumer segment saw net revenue growth of 3% year-over-year. Home lending revenue jumped by 31%, while credit card and auto loan revenue grew by 14%. However, revenue from banking and wealth management remained flat.

The surge in home lending suggests strong demand in the housing market, likely due to favorable interest rates. Growth in credit card and auto loans reflects consumer confidence and spending. The flat banking and wealth management revenue could signal market saturation or increased competition.

JPM is expanding its popular Sapphire cards and opening new branches to attract more customers. Investments in digital banking are also improving customer experience and operational efficiency. Looking ahead, the segment is expected to benefit from a strong economy, though challenges like interest rate shifts and competition remain.

Corporate & Investment Banking (CIB)

The Corporate & Investment Banking segment provides advisory services, capital raising, and cash management for large corporations, along with trading services.

In the second quarter of 2024, investment banking fees surged by 50%, with notable gains in mergers and acquisitions advisory (up 45%), equity underwriting (up 56%), and debt underwriting (up 51%).

JPMorgan is benefiting from a rebound in investment banking activity, securing more deals in IPOs, stock offerings, and mergers due to reduced global competition. With a strong reputation and global reach, JPM remains a top choice for corporate clients. The bank is focusing on technology improvements in trading and client services, with continued growth expected in the coming months.

Commercial Banking (CB)

The Commercial Banking segment offers services like loans, cash management, and investment banking for businesses and institutions.

In the second quarter of 2024, commercial banking revenue increased by 9%, driven by a 15% rise in commercial real estate revenue. Corporate client banking revenue grew by 2%, but middle-market client revenue declined by 3%, likely due to economic challenges or competition.

JPMorgan is focused on attracting more mid-sized businesses by offering comprehensive services and leveraging its stability as a large bank. This segment is expected to see steady growth, particularly in real estate and corporate banking.

Asset & Wealth Management (AWM)

The Asset & Wealth Management segment manages investments and provides services like retirement planning, brokerage, and trust management.

In the second quarter of 2024, banking and wealth management revenue remained flat. Market volatility and competition from passive funds may have impacted growth. JPM is diversifying its offerings with alternative investments and improving digital platforms to better serve clients. It should be noted that future growth in this segment may come from market recovery and attracting new high-net-worth clients.

Key Acquisitions Driving Growth

JPMorgan Chase has strategically expanded its operations through significant acquisitions. In 2008, the bank acquired Washington Mutual’s assets for $1.9 billion from the FDIC, significantly enhancing its presence in key markets, particularly in California. Earlier that year, JPM also took over Bear Stearns in a stock-for-stock deal, solidifying its position in investment banking.

More recently, in May 2023, JPMorgan acquired the majority of First Republic Bank’s assets, including $92 billion in deposits and $173 billion in loans. The deal was backed by a loss-sharing agreement with the FDIC and included $50 billion in five-year fixed-rate financing. Importantly, JPMorgan did not assume First Republic’s corporate debt or preferred stock, making it a clean acquisition. All legacy First Republic branches reopened under the JPMorgan Chase brand, and the bank recorded a one-time $2.6 billion post-tax gain, offset by $2.0 billion in restructuring costs. This acquisition further strengthens JPM’s retail and commercial banking footprint.

JPM Stock Forecast: Regulatory Compliance

JPMorgan Chase operates under strict regulatory frameworks that govern its business activities. The Bank Holding Company Act imposes limitations on JPM and other banks, restricting them to traditional banking activities and closely related sectors. This ensures that banks focus on core financial services such as lending, deposits, and payments, while minimizing risk from unrelated businesses.

However, as a financial holding company, JPMorgan has more flexibility under U.S. law. This allows the bank to engage in a broader set of financial activities, such as underwriting securities, trading in financial markets, and making strategic investments in non-financial companies through merchant banking. These extended capabilities provide JPM with opportunities to diversify its revenue streams while remaining compliant with regulatory requirements.

JPM Stock Forecast: Technical analysis

The upward movement of JPM is confined within two trendlines forming a channel. This can be interpreted as an upward channel rather than a rectangular pattern, as the price is moving in a consistent upward direction between these support (green line) and resistance (red line) trendlines. The price is clearly respecting this channel, with pullbacks toward the lower trendline and rallies towards the upper trendline.

The 50-day moving average (green line) is moving upward and is well above the 200-day moving average (blue line), signifying a strong bullish trend. The fact that the price remains significantly above the 200-day moving average reflects sustained momentum and confirms that the stock has been in a long accumulation phase. This indicates that there is still substantial buying energy supporting the upward trend. The most recent candlestick within the channel shows a large real body and high volume, marking a potential Sign of Weakness (SOW). The large volume suggests that sellers entered the market strongly at this point. Based on Wyckoff methodology, the top of this SOW candlestick represents a supply zone where selling pressure might continue. The high volume at the top of this movement often indicates that there are supply forces (sellers) waiting to unload positions when prices approach these levels again. The current New Highs-New Lows ratio is tilting towards a decline, signaling a weakening bullish sentiment and suggesting that the upward energy may be fading. As a result, the stock seems to be entering a sideways consolidation phase, which could potentially last for a while. However, this does not necessarily imply that the sideways movement is a distribution phase, given that the major holders of JPM stock are large institutional investors like pension funds. Such institutions tend to hold their positions over longer periods, which provides support to the stock during consolidation phases.

Given the analysis, we can set a conservative price target at $220 per share, which corresponds to the level just above the SOW candlestick. This price point represents a reasonable target for traders looking for a break above the recent supply zone. Given the $220 price point is quite closed to the current $211, I recommend a hold position.

JPM Stock Forecast: Analysts’ Consensus

There’s a shift in opinions from jul/aug to sep, as more analysts turned from Strong Buy/Buy to Hold recommendation, according to yahoo finance. The forecasting price range average is 216.13 price per share, showing most analysts are also considering the trend is likely to enter a sideway movement.

Conclusion

I take a hold recommendation on JPM due to the stock’s projection. Although the stock continues to benefit from institutional support and a long-term bullish trend, signals such as the New Highs-New Lows ratio and the large volume at recent price peaks suggest weakening bullish sentiment. While JPM’s financial performance remains robust, the potential for a sideways consolidation phase suggests the stock may not experience significant imminent price growth.

It is worth paying attention that the stock-picking AI of I Know First has a high signal on the one-year market trend forecasts, supporting my position for the JPM stock forecast. The light green for the short-term forecasts is mildly bullish, while the darker green is a strong bullish signal for the one-year forecast.

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Please note-for trading decisions use the most recent forecast.