JPMorgan reports earnings Friday. Be careful of this 'banking proxy', maybe take profits?

Jessica Amir joined discussion · Jul 8 21:26

Given JPM's shares are up 20% YTD and they report Friday, you may want to consider taking profits given US employment is expected to decline and US borrowing continue to sag.

This Friday we will get a gauge on the health of the US consumer in JPM's $JPMorgan (JPM.US)$ results and outlook. If you don't own it maybe look away as there are better opportunities, as its revenue growth is so little. Here is a summary in point form of what you need to know.

o JPM is the 11th biggest company in US. Biggest bank in the US.

o JPMs shares have had a good run. Up 20% this year. But could it be chance to take profits? As lending is slowing. And the US consumer has depleted all their savings from the pandemic.

o JPM is only expected to see 6.8% revenue growth for the 2024 year which will be a decline from last year's net revenue.

o Why? This quarter the street is thinking we'll see the 5th quarter of double-digit costs growth. That's why overall profits are expected to fall this year and next.

o In a positive for JPM, JPM's advisory businesses are charging greater fees amid the recent dealmaking revival in investment banking

o JPM is expected to grow market share in card cards and retail banking - so it should report in line expectations if history repeats itself

o JPM is paying a forward dividend yield of 2.25%.

JPM has a history of delivering stronger than expected results. But it seems analysts think little of banks. Meaning, there is a low bar. BUT... Over the last four weeks we can see that JPM has been upgraded. Hello! We could be set up for a disappointment.