On Friday, Goldman Sachs (NYSE:GS) maintained a Buy rating on JPMorgan Chase & Co. (NYSE:JPM) with a steady price target of $229.00. JPMorgan reported first-quarter earnings per share (EPS) of $4.44, surpassing the estimates set by Goldman Sachs and Visible Alpha Consensus Data, which stood at $4.25 and $4.18, respectively. After adjustments for various non-core items, the core EPS was $4.79, slightly above the anticipated figures.
The company's quarterly results showed a core return on tangible common equity (ROTCE) of 22.7%, which was 1.05% higher than consensus estimates and significantly above the management's medium-term ROTCE guidance of 17%. The financials were bolstered by the FRC deal, contributing $1.7 billion to revenue, $0.7 billion to net income, and a 1 percentage point increase to return on equity (ROE).
Despite a net interest income (NII) that fell short of consensus by 0.4% and a 5 basis point net interest margin (NIM) miss, JPMorgan saw an improvement in deposit costs and balances.
JPMorgan's core efficiency ratio outperformed consensus expectations by 85 basis points. The company also repurchased $2.8 billion of its stock during the quarter and reported a Common Equity Tier 1 (CET1) ratio of 15.0%, well above the 12.4% minimum requirement.
Looking ahead, JPMorgan's management maintained its 2024 net interest income guidance of approximately $90 billion, which aligns with Street estimates but falls below Goldman Sachs' expectation of $92.6 billion.
The bank raised its 2024 expense guidance to around $91 billion, citing three-quarters of the increase as attributable to a $750 million Federal Deposit Insurance Corporation (FDIC) special assessment.
Goldman Sachs anticipates further details on several aspects, including the underpinning assumptions of the NII guidance, the outlook for capital markets, potential efficiency improvements over the next two years, and the expectations for credit normalization outside of office commercial real estate.
InvestingPro Insights
With JPMorgan Chase & Co. (NYSE:JPM) delivering robust first-quarter earnings and Goldman Sachs maintaining a Buy rating, investors may find additional context through real-time data and insights from InvestingPro. The company's market capitalization stands strong at $561.29 billion, and it trades at a P/E ratio of 12.07, indicating a favorable valuation relative to near-term earnings growth. JPMorgan's commitment to shareholder returns is evident with a dividend yield of 2.32% and a notable history of raising its dividend for 13 consecutive years. Furthermore, the stock has demonstrated resilience with low price volatility and a significant return of 58.55% over the past year, nearing its 52-week high.
InvestingPro Tips highlight that JPMorgan is a prominent player in the banking industry, having maintained dividend payments for an impressive 54 consecutive years. Additionally, analysts predict the company will remain profitable this year, supporting the positive outlook reflected in the recent earnings report. For those seeking deeper analysis, there are 14 additional InvestingPro Tips available, providing a comprehensive view of JPMorgan's performance and potential. To access these insights, consider using the coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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