Morgan Stanley Upgrades JPMorgan (JPM) to Overweight
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Morgan Stanley analyst Betsy Graseck upgraded JPMorgan (NYSE: JPM) from Underweight to Overweight with a price target of $153.00 (from $126.00).
The analyst comments "JPMorgan Chase (JPM, Overweight): Operating leverage is inflecting positively, from -510bps in 2021 and -260bps in 2022e to +110bps of positive operating leverage in 2023, driven by revenues up 10% y/y and expenses up 9% y/y. We think risks around operating leverage skew to the upside as JPM has already provided guidance on 2023 NII of ~$74B and our 9% expense growth estimate feels conservative. On capital, progress is being made on JPM's higher CET1 ratio requirements, with JPM already managing down its standardized RWA by $23B (1%) in 3Q22 as CET1 increased 30bps to 12.5%. In addition, CCB is taking deposit share across the country, with median deposit share up 1.5% across the Top 50 US MSAs over the last 5 years and median 3.1% across the Top 25 US MSAs.
This reflects JPM's 500 new branch builds since 2017 with 20% of JPM's branch network <10 years old. In a hard landing bear case scenario, we find JPM has historically de-rated less than peers in recession. Our price target of $153 applies a 12x 2023 target PE against a 14% ROE, offering 16% upside."
Shares of JPMorgan closed at $131.37 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst PT Change, Hot Comments, Hot Upgrades, Upgrades
Related EntitiesJPMorgan, Morgan Stanley
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