JPMorgan Doing Well In A Still-Challenging Environment

The love affair between Wall Street and JPMorgan (NYSE:JPM) has cooled slightly since my last update on the company, but only slightly, as the shares have risen 7% since mid-January – a little less than the S&P 500 and worse than Citi (NYSE:C) and Morgan Stanley (NYSE:MS), but still better than regional banks like U.S. Bancorp (NYSE:USB) and Wells Fargo (NYSE:WFC), not to mention banking indices like the KBW Bank Index.

Not everything is going perfectly, as net interest margin leverage is still modest at best across the sector and JPMorgan saw rare underperformance from its trading and i-banking operations. But JPMorgan is posting excellent loan growth and good expense leverage, and still has room to grow across businesses like consumer and business banking, as well as asset/wealth management and other fee-generating services like treasury and payments. With good near-term performance and a credible ramp toward 15% returns on tangible common equity, a share price in the low $90s is not unreasonable and still leaves the door open for high single-digit to low double-digit annual returns.

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JPMorgan Doing Well In A Still-Challenging Environment