Attractive PE Ratio
Moderate Price to Sales Ratio
Strong Return on Equity
High Net Profit Margin
Strong Liquidity Ratios
Low Debt to Assets Ratio
💪 Strong Financial Performance
🏆 Market Leadership
🌐 Diversified Business Model
🚀 Growth in Digital Banking
📈 Optimistic Investment Banking Outlook
Negative Price to Free Cash Flow Ratio
Low Gross Profit Margin
High Debt to Equity Ratio
Negative Free Cash Flow per Share
📉 Margin Compression
⚠️ Credit Cost Concerns
🔄 Uncertainty in NII Outlook
💼 Dependence on Economic Recovery
Overall, JPMorgan Chase demonstrates a strong business quality with robust financial performance and market leadership. However, challenges such as margin compression and increasing credit costs pose risks. Future prospects indicate growth potential in digital banking and investment banking, but uncertainties regarding NII and economic recovery could impact overall performance.
Analysis Date: January 15, 2025
Last Updated: March 12, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$793.52
Current Market Price: $207.26
IV/P Ratio: 3.83x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
74.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for JPM
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (10.20)
P/B ratio ≤ 1.5 (1.73)
Current ratio ≥ 2.0 (33.35x)
Long-term debt < Net current assets (0.23x)
Margin of safety (74.0%)
JPM does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
JPM demonstrates a solid Return on Equity (ROE) of 17.10%, reflecting effective management in generating profits from shareholders' equity.
The Net Profit Margin of 32.96% indicates that JPM retains a significant portion of revenue as profit, showing good operational efficiency.
A Gross Profit Margin of 100% suggests high revenue but also raises concerns about the sustainability of this figure, as it may not accurately reflect operational efficiency.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
17.27%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
0.35%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
100.00%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
32.96%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
JPM's Current Ratio of 6.02 and Quick Ratio of 6.02 indicate excellent liquidity, showing that the company can easily cover its short-term obligations.
A Debt to Assets ratio of 11.35% shows that JPM is not overly leveraged, indicating a solid financial foundation with manageable debt levels.
The Debt to Equity Ratio of 1.32 suggests that JPM has a relatively high level of debt compared to its equity, which could pose risks in a downturn.
With Free Cash Flow per Share at -20.45, JPM is currently not generating positive free cash flow, which can affect its ability to invest and return value to shareholders.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
1.32x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
33.35x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
JPMorgan Chase reported a net income of $14 billion for Q4 2024, with EPS of $4.81, showcasing robust profitability. The full year net income was $54 billion with an ROTCE of 20%, reflecting effective capital utilization.
The Investment Bank achieved record revenues in markets and advisory fees, ranking first with a wallet share of 9.3%. This demonstrates a strong competitive position and market leadership.
JPMorgan Chase has a diversified business model with growth across Consumer & Community Banking (CCB), Commercial & Investment Bank (CIB), and Asset & Wealth Management (AWM), reducing dependence on any single revenue source.
Net Interest Income (NII) ex-markets decreased by $548 million or 2% due to lower rates and deposit margin compression, indicating challenges in maintaining profitability amid changing interest rates.
Credit costs increased to $2.6 billion, largely driven by net charge-offs, which raises questions about future credit quality and potential risks in the lending portfolio.
The firm is successfully acquiring new clients in the digital banking space, with nearly 10 million new card accounts, indicating strong growth potential in the consumer market.
The Investment Banking segment sees a positive momentum with an optimistic outlook for the pipeline, driven by increased advisory and underwriting fees, which may lead to future revenue growth.
The expected decline in NII due to anticipated interest rate cuts in 2025 poses risks to revenue stability, highlighting future challenges in maintaining profitability.
Future loan growth remains uncertain and dependent on broader economic recovery, particularly in segments like acquisition finance, indicating vulnerability to macroeconomic conditions.