JPMorgan Chase & Co. (NYSE: JPM) has posted a share price gain of about 57% over the past 12 months. Like Goldman Sachs, essentially all the gain has come since November. Over the past 10 years, JPMorgan stock has added 340%, more than any of the other U.S. megabanks.
One difference between the two big banks is that JPMorgan’s provision for credit losses last year totaled $17.5 billion compared to Goldman Sachs’s total of $3.1 billion. The bank’s so-called fortress balance sheet contributed to an 8% increase in book value per share last year and a return on tangible common equity of 24%, both significantly better than 2019’s performance.
Of 28 analysts’ ratings on the shares, 13 are rated either Buy or Strong Buy and 13 are rated Hold. The consensus price target is $161.74. With shares trading currently at around $156.25, the potential upside on the stock is 3.5%. At the high target of $187, the upside potential is 20%.
For the first quarter, analysts expect JPMorgan to report EPS of $3.07 on revenue of $30.52 billion. That’s a 287% jump in EPS on a revenue increase of 5%. Estimated second-quarter results call for EPS of $2.89 (up 109% year over year) on a 2.9% decline in revenue. For the full fiscal year, EPS is currently expected to rise 26.7% to $11.25, while revenue is forecast to decline by 4% to $118.07 billion.
The stock currently trades at around 14.1 times expected 2021 EPS, 13.3 times estimated 2022 EPS and 12.6 times estimated 2023 earnings. The stock’s 52-week range is $82.40 to $161.69, and JPMorgan pays an annual dividend of $3.60 (yield of 2.30%).
Wells Fargo & Co. (NYSE: WFC) stock has risen by about 26.5% over the past 12 months, after closing out 2020 down nearly 42%. As recently as October 28, the shares traded down more than 66%.
Even though the bank had exposure to the Archegos Capital Management implosion, Wells Fargo said late last month that it had been able to unwind its position without taking a loss (Goldman Sachs also called its loss related to Archegos “immaterial”). The albatross around Wells Fargo’s neck is the continuing regulatory cap on the bank’s assets imposed by the Fed. It gained a little slack last month, but reputational risk continues to plague the bank three years after a series of scandals that included creating fake customer accounts.