Some companies are good defensive plays, others are good offensive plays. A rare few are both, and I believe that JPMorgan (JPM) qualifies. Strong operating scale and risk management practices mitigated the damage from the pandemic, and the company is now well-positioned to leverage its scale to drive even more share growth in the recovery, leading in turn to greater profit growth and share price appreciation.
I follow a lot of well-run banks, but I believe JPMorgan is still the best of the bunch, and I believe 17.5%-plus ROTCEs are possible on a long-term sustained basis, as well as GDP-plus growth, as the bank is one of the few capable of functioning as a truly national banking franchise in both commercial and retail banking.
As the Street has shifted from a preference for quality to a preference for growth, JPMorgan has lagged some this year, but as a long-term investor, I don’t need my holdings to beat the peer growth every month I hold them. I still see a high single-digit annualized return potential here, and though JPMorgan is not the cheapest bank, I think the combination of quality, value, and long-term opportunity should keep it in serious contention for most investors.
Read more here:
JPMorgan Likely To Leverage The Recovery To Earn Even Higher Returns
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