JPMorgan’s stock (NYSE: JPM) has gained 8% YTD, as compared to the 14% rise in the S&P500 over the same period. Further, the stock is currently trading at $144 per share, which is 12% below its fair value of $163 – Trefis’ estimate for JPMorgan’s valuation.
Amid the current financial backdrop, JPM stock has shown strong gains of 20% from levels of $120 in early January 2021 to around $145 now, vs. an increase of about 15% for the S&P 500 over this roughly 3-year period. However, the increase in JPM stock has been far from consistent. Returns for the stock were 28% in 2021, -13% in 2022, and 8% in 2023. In comparison, returns for the S&P 500 have been 27% in 2021, -19% in 2022, and 14% in 2023 – indicating that JPM underperformed the S&P in 2023. In fact, consistently beating the S&P 500 – in good times and bad – has been difficult over recent years for individual stocks; for other heavyweights in the Financial sector including V, MA, and BAC, and even for the megacap stars GOOG, TSLA, and MSFT. In contrast, the Trefis High Quality Portfolio, with a collection of 30 stocks, has outperformed the S&P 500 each year over the same period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics. Given the current uncertain macroeconomic environment with high oil prices and elevated interest rates, could JPM face a similar situation as it did in 2023 and underperform the S&P over the next 12 months – or will it see a strong jump?
Support authors and subscribe to content
This is premium stuff. Subscribe to read the entire article.