May 19, 2015

Confident in J.P. Morgan stock

JPMorgan's shares have more doubled the return of the large bank stock index over the last three months.

Nevertheless, I feel strongly that (1) JPM is among the best positioned money center banks, (2) the bank has the best scale of any major bank and (3) consensus earnings estimates are a bit too low for 2015 and 2016 (with the source of the potential beat in investment banking, strength in the commercial bank and in real estate),

JPMorgan still trades at a modest (5%) valuation discount to its peers.

I expect JPMorgan's shares to trade in the low- to mid- $70s by the same time next year.

The shares were placed on my Best Ideas list on March 26, 2015 at $59.05.

JPM remains on my Best Ideas list. 

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