Is JPMorgan Chase & Co. (NYSE: JPM) Likely To Outperform In 2018?

January 10, 2018, 18:13 pm ET, BY Simon M.- Contributor| Editor: Thomas H. Kee Jr. (Follow on LinkedIn)

JPMorgan Chase & Co. (NYSE: JPM) performed extremely well in 2017 given that its stock price hit a high of $108.46 in December. Given the American lender’s impressive performance in 2017, many investors would like to know whether the bank’s performance shall be as impressive in calendar 2018.

Article Summary

JPM had a stellar 2017 where its stock price rallied higher.

The bank also increased its overall revenues, its earnings per share and its ROE.

The bank still has room for growth in 2018 given the positive economic conditions.

Here’s the trading report on JPM.

Most of the impressive performance posted by JPM can be directly attributed to the bank’s exceptional management, which have focused on growing the company while maintaining high ethical standards. JPM has not been rocked by any of the scandals that have rocked financial institutions such as Wells Fargo & Co (NYSE: WFC) despite the management’s aggressive operating strategy.  

Over the past two years, JPM stock has rallied higher by over 90% as the company has steadily grown its revenues as well as earnings per share. However, one of the most important measures of a bank’s success its Return on Equity or ROE. JPM has posted an impressive of 11% in the latest quarter with many of its business units posting higher ROEs.

The bank’s overall CIB ROE came in at a respectable 13% where JPM was ranked as the number one global investment banking provider with average fees of 8.2%, while at the same time increasing its banking revenues by 5%. The bank’s consumer banking revenues increased by 25% to $2.1 billion, while its net income grew by 13% to $881 million. Its overall consumer loans grew by 10% to $200 billion.

JPM’s future performance is likely to be boosted by the economic recovery currently underway in the USA and other developed economies such as those in Europe. The improved economic conditions are especially good for lenders such as JPM given that consumers are more likely to borrow heavily amid positive prevailing economic conditions.

The improved economic conditions are also likely to result in an increase in the funds available for investment among JPM customers, which could lead to the bank recording an increase in Assets under Management in the USA and globally. The planned interest rate hikes by the Federal Reserve will also favor the bank as it will translate to a higher interest income from existing and new loans.

The bank’s prudent management is likely to capitalize on the prevailing economic conditions to steer it to higher profitability while improving its service standards to its customers.

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