JPMorgan Chase (JPM) Positive Outlook for 2024 If Rate Cut Happen September, NII Grow.
$JPMorgan(JPM.US$ is expecting to release its earnings on Friday (12 July) before the market open, we are also seeing several big banks scheduled to report their earnings,
Analyst is anticipating JPM to report earnings of $4.13 per share (-15% YoY) for JPM's Q2 on revenue of $44.0 billion (+3.9% YoY).
The factors that investors might be focusing is loan growth for many banks remains sluggish due to high interest rates, which could continue to weigh on net interest income (NII) in the near term.
NII growth potential is close to turning, though this largely depends on the timing and magnitude of the Fed's rate-cutting cycle.
JPMorgan Chase reported net interest income of $23.3 billion in Q1 and $21.9 billion in Q2 2023.
JPMorgan Chase (JPM) Year-To-Date - 24.32% Gain
On Wednesday (10 July), JPM only gain +0.08% ahead of its Q2 announcement. Though JPM has touched an all-time high the day before on Tuesday (09 July) before paring the gains on Wednesday.
JPM has exceeded the earnings mark in each of the last seven quarters. JPM stock has rewarded investors with about 25% return so far in 2024:
JPMorgan Chase (JPM) Analyst Stock Price Forecast and Target
Based on 23 Wall Street analysts offering 12 month price targets for JPMorgan Chase & Co. in the last 3 months. The average price target is $214.34 with a high forecast of $239.00 and a low forecast of $185.00. The average price target represents a 3.15% change from the last price of $207.80.
JPM might not provide a positive earnings, their NII growth potential is correlated to Fed rate cut cycle and also timing.
JPMorgan Chase (JPM) Ownership
The ownership structure of JPMorgan Chase & Co. (JPM) stock is a mix of institutional, retail and individual investors.
Approximately 39.60% of the company’s stock is owned by Institutional Investors, 2.99% is owned by Insiders and 57.41% is owned by Public Companies and Individual Investors.
So any trading movement from institutional would be significant, but we should also looked at the insiders trading.
JPMorgan Chase (JPM) Recent Insider Trading
In June 2024, we are seeing some sales of JPM stocks, though the amount is not a lot, but this might be significant, looking at the recent activity by GC, CIO, and CRO, what these positions have in common is the operations side of the business.
So I would look at the guidance and outlook for JPM when they report on Friday (12 July)
JPMorgan Chase (JPM) Recent Hedge Fund Trading
As mentioned above, the buying from hedge fund though happening in first quarter of 2024, is still good and positive. And the good news is there is no sales of stocks in second quarter.
But the risk of JPM on their loan growth because of high interest rate still exist, as the next rate cut is potentially happening only in September, if that decision stands.
JPMorgan Chase (JPM) Earnings Price Move
As the financial sector especially banks are still navigating the higher and longer interest rate, their growth from the loan remain sluggish.
So with net interest income (NII) not expected to grow in the near term, we might see JPM going lower post earnings if earnings came in flat and guidance for 2024 point to some risk and challenges from interest rate.
Hence, the price target might be lower.
JPMorgan Chase (JPM) Technical - MACD and KDJ
From the technical, we are seeing positive upside from MACD, but JPM stock price has started to consolidate, maybe it is waiting for the earnings.
As seen in KDJ, we can see that J value is trying to make upward move but we will have to see how price action is like for JPM today (11 July).
Summary
For JPM to really showing a nice positive upside, we might need to look at the outlook guidance for 2024, if the rate cut happen in September 2024, we might see JPM a potential buy now.
And the rally might happen close to September. I would prefer to monitor the price action as seen in Wednesday (11 July) trading, JPM did not perform that well.
Appreciate if you could share your thoughts in the comment section whether you think JPM would provide a positive outlook for 2024 given that September rate cut would help its loan growth.
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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KL6808 : While I do not see an improvement in its NII in the near future, if its fee based income or investment banking also isn't doing well due to the macro and overall capital market condition, the forward guidance will not be impressive.
Hence, I will not add on to my existing holding of JPM and other banking stocks, instead, I am open to trim them.