It may be boring, but JPMorgan Chase's (NYSE:JPM)
ability to deliver on the "blocking and tackling" issues identified by
management continues to build value for long-term shareholders of this
enormous financial institution. More specifically, JPMorgan's management
has managed to reduce its GSIB buffer and make progress on cost
reductions while simultaneously driving above-average loan growth.
These
improvements have led me to adjust my revenue and earnings targets, as
well as the company's risk premium, and those improvements support a
higher fair value. JPMorgan definitely has a delicate balancing act to
maintain between further reducing its buffers and costs and not
alienating customers, not to mention balancing the risk of expanded
credit and credit losses, and maintaining leading market share in
multiple businesses without getting dragged into a race to the bottom on
pricing.
JPMorgan appears to be handling this balancing act with
considerable skill. Given that, as well as the higher fair value and a
generally "meh" attitude towards banks over the past six months, I think
JPMorgan is looking a little more interesting as a new buy.
Read the full article here:
JPMorgan's Steady Progress Not Fully Rewarded
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