In his annual letter to shareholders, JPMorgan CEO Jamie Dimon said, “The current crisis is not yet over, and even when it is behind us, there will be repercussions from it for years to come.” If inflation should rise to around 6% (as Dimon predicted in January), the big banks almost certainly will have to boost loan-loss reserves by significant amounts, cutting into profitability.
Of 26 analysts covering the stock, 18 have a Buy or Strong Buy rating, while the other eight rate it at Hold. At a share price of around $128.50, the upside potential based on the median price target of $150.00 is 16.7%. At the high price target of $179.00, the upside potential is 39.3%.
Analysts expect JPMorgan to report first-quarter revenue of $35.68 billion, up by 3.3% sequentially and 16.1% higher year over year. Adjusted EPS are forecast at $3.35, down 6.1% sequentially but up 27.4% year over year. For the full 2023 fiscal year, current estimates call for EPS of $12.62, down 4.4%, on revenue of $139.68 billion, up 8.5%.
JPMorgan stock trades at 10.2 times expected 2023 EPS, 9.9 times estimated 2024 earnings of $12.92 and 9.6 times estimated 2025 earnings of $13.36. Its 52-week range is $101.28 to $144.34. JPMorgan pays an annual dividend of $4.00 (yield of 3.13%). Total shareholder return for the past 12 months was negative 0.14%.
Wells Fargo
Wells Fargo & Co. (NYSE: WFC) is the nation’s third-largest bank, and its share price has dipped by 20.2% over the past 12 months. Since early March, the stock is down by 16%. Net interest income is expected to rise by 10.3% year over year in 2023, assuming modest loan growth. The risk for Wells Fargo is that its credit losses could be worse than that of its peers, leading to even higher reserves and lower profitability.
Analysts remain bullish about Wells Fargo. Of 26 brokerages covering the bank, seven have a Hold rating and 19 have Buy or Strong Buy ratings. At a share price of around $39.40, the upside potential based on a median price target of $47.58 is 20.8%. At the high price target of $58.00, the upside potential is about 49.7%.
Analysts expect first-quarter revenue to total $20.07 billion, up 2.1% sequentially and by 14.1% year over year. Adjusted EPS are forecast at $1.16, down 20% sequentially but 31.8% higher year over year. For the full 2023 fiscal year, EPS are forecast to rise by 7.8% to $4.80, and revenue is expected to increase by 7.5% to $79.28 billion.
Wells Fargo stock trades at 8.2 times expected 2023 EPS, 7.9 times estimated 2024 earnings of $5.00 and 7.9 times estimated 2025 earnings of $5.00. The stock’s 52-week range is $35.25 to $49.90. Wells Fargo pays an annual dividend of $1.20 (yield of 3.11%), and total shareholder return for the past 12 months is negative 18.16%.
Originally published at 24/7 Wall St.
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