Is JPMorgan Stock A Buy Or Sell After Recent Earnings

(Preview) Company Update (JPM US) (Neutral)

Summary

• JPM shares closed down 6.3% on Friday after Q4 2021 results. We believe investors were disappointed by the outlook on 2022 and beyond.

• Management reiterated that return on equity will likely be below target in 2022, and their comments indicate this may continue into 2023.

• Headwinds include a slow recovery in interest income, lower investment banking activity, higher expenses, and higher capital requirements.

• Q4 saw earnings (excluding reserve releases) continuing to trend down, investment bank revenues falling, and card income under pressure.

• With shares at $157.89, we expect an exit price of $194 and a total return of 35% (8.4% annualized) by 2025 year-end. Avoid.

Introduction

JPMorgan Chase stock closed down 6.3% on Friday (January 14), after the company released Q4 2021 results.

We downgraded our rating on JPM to Neutral in April 2021. After Friday's fall, JPM shares have risen just 1.8% in the seven months since our downgrade.

We believe that investors were disappointed because JP…