Bull of the Day: JPMorgan Chase (JPM)

The momentum investing theory of buy high and sell higher is starting to look plausible for JPMorgan Chase JPM stock as the bank leader currently sports a Zacks Rank #1 (Strong Buy) and lands the Bull of the Day.

Illustrating its ongoing dominance and leadership in the banking industry, JPMorgan was able to continue its impressive streak of surpassing quarterly expectations last Tuesday. More applaudable, JPMorgan has taken center stage regarding strategic investments that align with national security priorities and has positioned itself as a key player in shaping the future of the American economy through technology.

Trading just under $300 a share, JPM is up over +20% this year, but does offer a 6% discount from its 52-week high of $318, which it hit in late September.  

JPM’s “Security and Resilience Initiative”

Assisting the U.S. Government in a plan to ramp up domestic production of rare earth minerals that are critical for defense and tech industries, JPMorgan has launched a “Security and Resilience Initiative” in which it will deploy $1.5 trillion in financing over the next decade to support America’s strategic manufacturing, technological innovation, and infrastructure. Notably, this will include $10 billion in direct equity and venture capital investments in U.S.-based companies.

This comes as China has long dominated the rare earth supply chain and has recently exercised tighter export restrictions for these essential commodities as part of its tariff retaliation against the U.S.

Strengthening its relationships with policymakers and regulators, JPMorgan stands to benefit by enhancing its long-term lending portfolio in high-growth markets that are likely to receive more government support and public interest.

EPS Revisions Rise After Strong Q3 Results

Regarding its short-term outlook, fiscal 2025 and FY26 earnings estimate revisions have continued to trend higher since JPMorgan’s Q3 report. Seeing strength in investment banking, JPMorgan’s trading revenue hit a record in Q3, boosting its top line 9% to $46.42 billion compared to $42.65 billion in the prior year quarter. Even better, net income reached $14.4 billion or $5.07 per share, a 16% increase from EPS of $4.37 in Q3 2024.

JPMorgan has now surpassed sales estimates for seven straight quarters and has exceeded earnings expectations for 13 consecutive quarters. Over the last four quarters, JPM has had an average sales and earnings surprise of 3.81% and 11.01% respectively.

Attributing to its strong buy rating is that FY25 and FY26 EPS estimates for JPM are up nearly 1% in the last seven days. In the last month, FY25 and FY26 EPS revisions have risen over 2% and are up more than 4% over the last quarter. 

JPMorgan's annual earnings are now expected to be up over 1% this year and projected to rise another 4% in FY26 to $20.90 per share. 

JPM’s Strong Capital Efficiency Metrics

Outside of JPMorgan’s operational efficiency, there have been strong indicators of efficient capital deployment, including a 17% ROE with return on tangible common equity (ROTCE) hitting 20%.

Indicative of a bank’s financial strength and stability, JPMorgan’s standardized and advanced Common Equity Tier 1 (CET1) ratios are currently above 14%. It’s noteworthy that JPM posted the highest CET1 mark among the 22 largest U.S. banks in the Federal Reserve’s 2025 stress test at 12.5%.  

Bottom Line

Supportive of the in-depth details as to why JPM stock looks hot right now, the cherry on top is that the rising EPS revisions have magnified its reasonable forward P/E valuation of 15X. Plus, JPM is offering a generous 1.98% annual dividend of $1.50 per share, after increasing its yield by 20% so far this year. In addition to its strong buy rating, JPM stands out with an “A” Zacks Style Scores grade for Momentum.

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This article originally published on Zacks Investment Research (zacks.com).

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