JPMorgan Beats The Mark Again, But Could Do Even Better

Say what you will about managing earnings and expectations, but 12 straight quarters of better-than-expected earnings from JPMorgan Chase (JPM) is still a credit to the quality and strength of this bank. JPMorgan continues to outdo its competitors when it comes to loan growth and deposit-gathering, while running its earning assets through a very competitive cost structure.

Although JPMorgan has become a little less asset-sensitive, the company still has levers to pull to drive greater profitability. As strong as the company’s retail banking operations have been, the ROE is still below management’s target, and commercial lending is starting to show some growth. Between ongoing loan growth, expense leverage, and the benefits of a lower tax rate, JPMorgan should be able to grow earnings at a mid single-digit to high single-digit rate, with even greater EPS growth by way of ongoing buybacks.

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JPMorgan Beats The Mark Again, But Could Do Even Better