JP Morgan Chase & Co. Share Price Forecast September 2021 – Time to Buy JPM Stock?
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Shares of American multinational investment bank and financial services holding company JP Morgan Chase & Co. (NYSE: JPM) are in the red today after closing at $157.07 on September 14th, (20:51 UTC -4). It has been one of the best performing banks in the world in the past decade, which has seen its revenue increase by 13% on an annualised basis, with its share price increasing by 16% per year.
JP Morgan Chase & Co. – Technical Analysis
The financial statement of this bank reveals that the market cap is at $469.35 billion with total assets worth $3.684 trillion. Revenue for 2020 was at $125.82 billion with a profit margin of 23.04% compared to $141.33 billion in 2019.
Moving averages for JP Morgan Chase & Co. such as Exponential Moving Average (10)(158.76), Simple Moving Average (10)(159.08), Exponential Moving Average (20)(158.50), Simple Moving Average (20)(158.65) and Exponential Moving Average (30)(157.98) are overwhelmingly indicating a sell action. Oscillators such as Relative Strength Index (14)(47.17 ), Stochastic %K (14, 3, 3)(26.11), Commodity Channel Index (20)(−55.52) and Average Directional Index (14)(15.33) are neutral.
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Recent Developments
2020 was a tough year for banks but JP Morgan Chase held its value. It experienced a 5% decline in its stock price but still outperformed its peers. Share prices are up about 24% year to date and it returned 58% over the past year. JP Morgan Chase has shown consistency in its earnings, not reporting an operating loss since 2008. It has also achieved a one-off $13 billion settlement with the federal government back in 2013.
JP Morgan is both one of the top investment and commercial banks in the industry with robust trading, asset management and wholesale payment arms. This positions it to gain from revenue generated from market cycles. Known for its fortress balance sheet, the bank maintains a common equity tier 1 ratio of 13% and more than $500 billion in cash for protection against uncertainty such as inflation.
The shares have increased by more than 140% in the last 5 years and by 380% in the last ten years. These are impressive numbers for a highly saturated banking market and related to the growth of the economy. The bank’s return on equity came in at 18% at the end of the 2nd quarter, higher than the 8% average for commercial banks.
Should You Buy JPM Shares?
Investors should look at the bank’s capital strength and strong cash flow as these are positive signs for its dividend. Positive metrics include a quarterly dividend of $0.90 per share at a yield of about 2.3% at the time of writing. This range has been maintained by the bank for most of the past decade. Other metrics include a very low and manageable payout ratio of 26%. The company has also increased its annual dividend by 16% every year for the past decade.
The bank has not yet increased its dividend for 2021. However, CFO Jeremy Barnum disclosed the board’s intentions about increasing dividends to $1.00 per share, while keeping the pay-out ratio low. Many investors have a focus on narrowly categorised stocks based on broad assumptions which prevent them from investing in shares that are producing big-time growth. JP Morgan Chase falls into this category. As the market leader, the bank is well-positioned to invest in its growth and reward investors with a good dividend as it has all the cash, stability and earnings power required. Based on this investors should add JPM shares to their portfolio to not miss out on this amazing growth opportunity.
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