Improving earnings and revenues, along with continued growth in loans and deposits, make JPMorgan Chase & Co. JPM an attractive investment option now. The company’s rising net interest margin and stable asset quality are expected to support its financials.
Driven by these positives, analysts seem to be optimistic about this Zacks Rank #2 (Buy) stock’s prospects as it is witnessing solid upward estimate revisions. Over the past 60 days, the Zacks Consensus Estimate for 2017 has risen 2.9% to $6.83 while that for 2018 it increased 1.3% to $7.71.
Also, its shares have rallied 6.2% so far this year, outperforming the industry’s gain of 4.3%.
Further, JPMorgan has a number of other aspects that make it a solid investment option.
Revenue Strength: JPMorgan has been witnessing consistent improvement in revenues. Over the past three years (2014-2016), total revenues recorded a compound annual growth rate of nearly 1.2%. With improvement in rate environment and higher loan demand, management expects interest income to increase going forward.
The company’s projected sales growth of 6.2% for 2017 and 6.6% for 2018 ensures continuation of the upward revenue trend.
Earnings per Share Growth: JPMorgan has recorded an earnings growth rate of 16% over the last three to five years. Further, this earnings momentum is likely to continue in the near term as reflected by the company’s projected earnings per share (EPS) growth of 10.4% for 2017 and 12.8% for 2018.
Also, its long-term (three to five years) estimated EPS growth rate of 7.5% promises rewards for investors in the long run.
Impressive Capital Deployment: JPMorgan’s capital deployment plan is commendable. The company’s 2017 capital plan (approved by the Federal Reserve) includes a 12% dividend hike and $19.4 billion share repurchase authorization. Given its solid liquidity position and earnings strength, the company should be able to sustain improved capital deployments and continue enhancing shareholders’ value.
Superior Return on Equity (ROE): JPMorgan’s ROE of 9.37% compared with the industry average of 8.59%, mirrors the company’s commendable position over its peers.
Stock Looks Undervalued: JPMorgan stock looks undervalued with respect to its Price-to-Earnings (P/E) and Price-to-Sales (P/S) ratios. The company’s P/E ratio of 13.40 is below the industry average of 14.67. Also, its P/S ratio of 3.17 is slightly below the industry average of 3.23.
Other Stocks to Consider
Some other stocks in the finance space worth considering are BancFirst Corporation BANF, People's Utah Bancorp PUB and East West Bancorp, Inc. EWBC.
The Zacks Consensus Estimate for BancFirst Corporation has jumped 12.5% over the past 60 days, for 2017. Further, the company’s share price has increased 3.3% over the past six months. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
People's Utah Bancorp holds a Zacks Rank #2. Its earnings estimates for 2017 have risen 2.9%, over the past 60 days. Over the past six months, its shares have gained nearly 1%.
East West Bancorp also carries a Zacks Rank #2. The company’s current-year earnings estimates have increased 3.9% over the past 60 days. Over the past six months, its shares have gained 2.7%.
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J P Morgan Chase & Co (JPM) : Free Stock Analysis Report
BancFirst Corporation (BANF) : Free Stock Analysis Report
East West Bancorp, Inc. (EWBC) : Free Stock Analysis Report
People's Utah Bancorp (PUB) : Free Stock Analysis Report
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