Goldman Sachs maintained a Buy rating on JPMorgan Chase & Co. (NYSE:) on Friday with a stable price target of $229.00. JPMorgan reported first-quarter earnings per share (EPS) of $4.44, beating estimates set by Goldman Sachs and Visible Alpha Consensus Data of $4.25 and $4.18, respectively. After adjustments for various non-core items, core EPS came in at $4.79, slightly higher than expected numbers.
The company’s quarterly results showed a core return on tangible common equity (ROTCE) of 22.7%, 1.05% higher than consensus estimates and significantly higher than management’s medium-term ROTCE forecast of 17%. Financials were strengthened by the FRC deal, contributing $1.7 billion to revenue, $0.7 billion to net income, and a 1 percentage point increase in return on equity (ROE).
Despite a below-consensus net interest margin (NII) of 0.4% and a net interest margin (NIM) miss of 5 basis points, JPMorgan noted improvement in costs and deposit balances.
JPMorgan’s core efficiency ratio outperformed consensus expectations by 85 basis points. The company also repurchased $2.8 billion of its shares during the quarter and reported a Common Equity Tier 1 (CET1) ratio of 15.0%, well above the minimum requirement of 12.4%.
Looking ahead, JPMorgan management maintained its 2024 net interest margin guidance of approximately $90 billion, which is in line with Street estimates but below Goldman Sachs expectations of $92.6 billion. dollars.
The bank raised its 2024 spending forecast to about $91 billion, citing three-quarters of the increase as attributable to a $750 million special assessment from the Federal Deposit Insurance Corporation (FDIC).
Goldman Sachs anticipates further details on several aspects, including the assumptions underlying the NII guidance, the outlook for capital markets, potential efficiency improvements over the next two years, and expectations for credit normalization outside of commercial real estate at office use.
Insights on InvestingPro
With JPMorgan Chase & Co. (NYSE:JPM) delivering robust first-quarter earnings and Goldman Sachs maintaining a Buy rating, investors can find additional context through InvestingPro’s real-time data and insights. The company’s market capitalization stands at $561.29 billion and is trading at a P/E ratio of 12.07, indicating a favorable valuation for near-term earnings growth. JPMorgan’s commitment to shareholder return is evident with a dividend yield of 2.32% and a notable history of increasing the dividend for 13 consecutive years. Furthermore, the stock has demonstrated resilience with low price volatility and a significant return of 58.55% over the past year, approaching its 52-week high.
InvestingPro tips highlight that JPMorgan is a prominent player in the banking sector, having maintained dividend payments for 54 consecutive years. Additionally, analysts expect the company to remain profitable this year, supporting the positive outlook reflected in its recent earnings report. For those looking for a more in-depth analysis, there are 14 additional InvestingPro Tips, which provide a comprehensive view of JPMorgan’s performance and potential. To access this information, please consider using the coupon code PRONEWS24 for an additional 10% discount on a one-year or two-year Pro and Pro+ subscription on InvestingPro.
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