Among the larger banks, JPMorgan's (NYSE:JPM) post-election performance has been on the higher side of average (up about 25%), but the shares have been a standout (along with Bank of America (NYSE:BAC)) over the past year as the bank has been leveraging its strong market share and competitive positions as it waits for rates and economic conditions to improve.
Credit quality has been good and likely can't get much better, but loan demand can improve if the economy grows from here and higher rates should drive better spreads. What's more, JPMorgan and the rest of its large bank peers could be in place to benefit from a less stringent regulatory environment and a lower tax rate. While the shares look priced for a high single-digit return absent a meaningful reduction in the bank's tax rate, a meaningful reduction of the tax rate could drive a fair value into mid-to-high $80's.
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JPMorgan Benefiting From Calm Credit, A Strong Competitive Position, And Potential Catalysts