Baird Downgrades JPMorgan (JPM) to Underperform

Baird analyst David George downgraded JPMorgan (NYSE: JPM) from Neutral to Underperform with a price target of $235.00.

The analyst comments: "Downgrading JPM to Underperform, risk/reward getting unattractive at ~2.9x TBV, ~18.2% cap/assets, and ~9.5x PPNR. We realize we are fighting the tape here, and understand that JPM is a best-in-class franchise, with dominant share in all of their businesses and truly a fortress balance sheet. We simply think that expectations are super high here, with JPM shares trading at ~2.9x TBV (record) and ~18.2% cap/assets - the current cap/assets implies a 1.50%+ ROA in perpetuity at a 12x multiple - note that 2026 ROA expectations are ~1.21%. We also appreciate JPM's healthy capital position - we estimate that if JPM bought back ~$70B to get to ~12% CET1 (which won't happen), the pro forma ROTCE would be ~24.5%, which correlates to a ~3.1x TBV multiple ($263/share FV) using our P/TBV vs. ROTCE regression. Again, this is simply a view that returns in JPM shares will likely not be what they've been the last several years at these valuation levels."

For an analyst ratings summary and ratings history on JPMorgan click here. For more ratings news on JPMorgan click here.

Shares of JPMorgan closed at $288.75 yesterday.

You May Also Be Interested In

• JPMorgan Downgrades PLDT Inc. (TEL:PM) (PHI) to Neutral
• Jefferies Downgrades Aegis Vopak Terminals (AEGISVOP:IN) to Hold
• ICICI Securities Starts Cemindia Projects (CEMPRO:IN) at Buy (1)