Bank Of America Raises JPMorgan Price Target, Sees Multiple Growth Avenues

When a company like JPMorgan Chase & Co (NYSE: JPM) has performed as such a high level for so long, investors are often right to start to question how the company and the stock can continue to impress the market.

One analyst said Monday that JPMorgan investors have no reason to worry.

The Analyst

Bank of America analyst Erika Najarian reiterated a Buy rating on JPMorgan and raised the price target from $126 to $132.

The Thesis

JPMorgan should have no problem generating double-digit earnings growth in 2019 and 2020 thanks to expanding its presence in new markets, improving its operating efficiency and continuing its aggressive capital return strategy, Najarian said in a Monday note. (See her track record here.)

Investors may not fully appreciate JPMorgan’s growth opportunities in consumer and commercial banking, the analyst said. JPMorgan has more than 60 million credit card customers, but is nowhere near the largest U.S. bank branch operator in terms of physical branch locations, she said. Branch expansion into markets such as Boston, Philadelphia and Washington, D.C. could help JPMorgan add new customers, in the analyst’s view. 

New products and services could help the company better monetize its massive existing customer base, Najarian said. 

“The company’s recent product launches (e.g., You Invest, Sapphire Banking) should help JPM penetrate its current consumer customer base and make a splash in new markets.” 

Even modest regulatory reform could help JPMorgan reach 19-percent returns on tangible common equity by 2020, the analyst said. 

Price Action

JPMorgan shares were up 0.3 percent at $113.84 at the close Monday. 

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Photo by M.O. Stevens/Wikimedia.