JPMorgan Chase is the IBD Stock of the Day as the stock approaches a buy point and banking stocks in general extend rebounds.
JPMorgan stock is on pace to climb three of the past four weeks, and it has wiped out big losses that started April 3 with the announcement of sweeping import tariffs.
With assets of $3.9 trillion, JPMorgan is the nation's largest bank. JPMorgan stock also has the largest market cap of any bank, at $707 billion.
Shares rose 4% April 11, when the company reported first-quarter earnings of $5.07 per share, beating analysts' estimates. Revenue increased 8% to $45.31 billion, also beating Wall Street views. The bank's revenue rose to $9.7 billion, which it called "an exceptionally strong quarter with record revenue in equities" trading.
But CEO Jamie Dimon warned that "the economy is facing considerable turbulence" due to tariffs, trade wars, sticky inflation and other risks. Still, Dimon believes the bank can weather a recession, mild or harsh. "Either way, we can handle it and serve our clients," he told analysts in the earnings call.
Trends For JPMorgan Stock
While an economic downturn threatens JPMorgan stock and others, some trends now favor banks. For example, a steepening yield curve could boost banks' profit margins. Sector earnings have been solid, too.
Positive surprises reported by JPMorgan, Bank of America, Goldman Sachs, Wells Fargo and Morgan Stanley helped expand the financial sector's earnings growth, according to FactSet.
The blended (reported plus expected) earnings growth rate of the sector grew to 6.6% from 2.6% from estimates at the end of March. First-quarter earnings for S&P 500 financials are running 7.6% above consensus estimates. A full 80% of the index's financial issues have topped expectations.
After rising 25% in Q4 and 4% in Q1, analysts expect JPMorgan current-quarter earnings to climb 2% to $4.49 a share. For the full year, the consensus earnings estimate is $18.23 a share, nearly unchanged from 2024 earnings, according to FactSet.
JPM Stock Forms Base
JPMorgan stock is part of the money center banking industry group, which has been in the top 50 of the 197 industry groups tracked by IBD for about a month. The group is down 1% year to date, but up 25% from the April 7 low.
IBD's banks sector, comprised of seven separate industry group, is still down more than 7% this year, ranked 17th out of 33 sectors. After foreign banks, money center banks is the best-performing group in the sector, currently No. 42.
The stock is forming a double-bottom base with a 254.67 buy point. Shares Friday morning were 1% away from that target. The stock this week closed back above the 50-day moving average.
Shares fell as much as 28% in the latest base, undercutting a previous base that formed in December and January. That effectively reset the stock to a first-stage base, and basically eliminates the risk that had built up from JPMorgan stock's 76% run from December 2023 to the record high in February.
The week ended April 11 is particularly bullish. Shares reversed higher to close with a 12% weekly gain and weekly volume was the highest in more than two years.
JPMorgan stock has a 21-day average true range (ATR) of 4.39%. The average true range is a metric available on IBD's MarketSurge that gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
There are exceptions, but given current market conditions, IBD generally suggests investors keep most of their portfolio focused on stocks with ATRs at or below 6%.
Wells Fargo stock also is closing in on a double-bottom buy point. Other bank peers, and financials generally, were strong performers Friday and for the week.
