3 Reasons to Invest in JPMorgan (JPM) Stock Amid Virus Woes
Despite the continued uncertainty related to the coronavirus pandemic, it seems to be a wise idea to add JPMorgan JPM stock to your portfolio now, given the company’s strong fundamentals and good growth prospects. JPMorgan, the biggest U.S. bank in terms of total assets, remains well-positioned for growth, driven by the consistent rise in loans and deposit balances, and its efforts to open branches in new regions despite near-zero interest rates.
Moreover, the stock has been witnessing upward earnings estimate revisions of late, reflecting that analysts are optimistic regarding its growth potential. Over the past 60 days, the Zacks Consensus Estimate for its 2020 earnings has moved 1% upward. Its 2021 earnings estimate has witnessed a marginal upward revision over the same period.
Thus, the company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Looking at its price performance, shares of JPMorgan have rallied 6.6% over the past six months compared with the industry’s growth of 8.9%.
Mentioned below are the other factors that make the company a solid bet now.
Earnings Growth: Over the past three to five years, JPMorgan witnessed earnings growth of 13.8%, higher than the industry average of 11%. While the company’s earnings are anticipated to decline 44.4% in 2020, the trend will likely reverse after that. In 2021, its earnings are expected to grow 41.3%.
Moreover, the company’s long-term (three-five years) estimated earnings growth rate of 5% promises reward for investors in the long run.
Revenue Strength: Although near-zero interest rates have been hurting JPMorgan’s top line to some extent over the past few quarters, the company continues to benefit from decent loan growth. It remains focused on acquiring the industry's best deposit franchise and strengthening its loan portfolio. Moreover, it is on track to open around 400 branches in 15-20 new markets by the end of 2022, which will provide support to the top line.
In fact, of late, the company’s mortgage banking business has been performing quite well. This is expected to act as a catalyst for overall top-line growth in the near term.
Notably, the Zacks Consensus Estimate for the company’s revenues suggests marginal year-over-year growth in 2020.
Superior Return on Equity (ROE): JPMorgan’s ROE ratio is 10.75% compared with the industry average of 8.52%. This indicates that the company reinvests more efficiently compared with peers.
Other Key Picks
Old Second Bancorp OSBC has witnessed an upward earnings estimate revision of 8.5% for 2020 over the past 60 days. Also, this Zacks #2 Ranked stock has gained 8.9% over the past six months.
Independent Bank Corporation’s IBCP ongoing-year earnings estimates have moved up 28.2% in the past 60 days. Further, the company’s shares have gained 8.8% over the past six months. At present, it carries a Zacks Rank of 2.
TD Ameritrade Holding Corporation’s AMTD current fiscal-year earnings estimates have moved 5% north in 60 days’ time. Additionally, the stock has jumped 20.5% over the past six months. It currently sports a Zacks Rank #1.
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JPMorgan Chase Co. (JPM) : Free Stock Analysis Report
TD Ameritrade Holding Corporation (AMTD) : Free Stock Analysis Report
Old Second Bancorp, Inc. (OSBC) : Free Stock Analysis Report
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