JPMorgan investor day should ‘reinforce the resiliency’ of the megabank: analyst

BofA Securities reiterated its buy rating on JPMorgan Chase & Co. ahead of the megabank’s investor day on Monday, calling the bank an outperformer in a tough year for the sector.

“We expect Monday’s investor day to reinforce the resiliency of the business model while showcasing franchise investments that should position the bank to remain a market share gainer,” BofA analyst Ebrahim H. Poonawala said Thursday in a research note. “We continue to view the stock as offering an attractive risk/reward.” 

JPMorgan Chase’s
stock is up 3.6% in 2023, compared with a 0.8% rise by the Dow Jones Industrial Average
a 9% rise by the S&P 500
and a 4.7% year-to-date drop by the Financial Select Sector SPDR exchange-traded fund
Bank of America Corp.
which is the closest U.S. rival to JPMorgan by market capitalization, is down 14.6% in 2023.

The investor day comes as JPMorgan Chase has fared better than its peers in terms of stock price and financial forecasts despite being subject to the “harshest regulatory requirements,” Poonawala said.

Also read: JPMorgan Chase deal for First Republic will add to earnings while calming regional-bank jitters: analysts

The bank’s presentation is expected to offer investors “increased confidence in the resiliency of the business model” while its “ability to gain market share should drive stock outperformance,” Poonawala said.

Investors will also be looking for any signs of whether there is a clear No. 2 to eventually succeed JPMorgan Chase CEO Jamie Dimon, Poonawala said.

BofA Securities does not expect any specific announcement on Dimon’s potential replacement.

Dimon remains the longest-serving CEO of a big bank, having been in the job since 2005.

In 2021, the board of JPMorgan Chase awarded Dimon 1.5 million stock options to remain at the bank until 2026.

Also read: Jamie Dimon sets cautious tone on bank regulation for smaller U.S. banks

“While the success of [JPMorgan Chase] goes well beyond one individual, we consider succession planning as among the hardest decisions that the board will need to make over the next few years,” Poonawala said. “To deliver best-in-class results at the scale and complexity of [JPMorgan Chase] is not easy and there is no shortage of companies (across a range of industries) that have stumbled following the retirement of a legendary CEO.”

JPMorgan Chase’s distressed acquisition of First Republic Bank will be one of many additional talking points for the bank, which announced the acquisition on May 1.

Also read: Big banks performed well in first quarter despite ‘gut-wrenching volatility’: analyst

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