How to Trade JP Morgan After Q3 Performance
The US earnings season kicked off with JP Morgan. This year, banks have been in the spotlight with the Silicon Valley Bank collapse in the first quarter and the uncertainty around interest rates and how that will affect their bottom line.
Learn more about JP Morgan's fiscal third-quarter performance and what the analysts are forecasting for the stock.
|Stock:||JP Morgan Chase & Co.|
|Symbol for Invest.MT5 Account:||JPM|
|Date of Idea:||16 October 2023|
|Time Line:||1 - 6 months|
|Position Size for Invest.MT5 Account:||Max 5%|
- The Invest.MT5 account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world.
All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose, as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing.
JP Morgan Fiscal Q3 2023 Performance
Here are some of the key highlights from the latest fiscal third-quarter earnings report from JP. Morgan:
- Earnings per share of $4.33
- Revenue of $40.69 billion vs $39.63 billion
- Profit up 35% to $13.15 billion from a year earlier
- Credit provisioning of $1.38 billion lower than $2.39 billion
- Retail banking division profit up 36% to $5.9 billion
- Corporate and investment banking division profit down 12% to $3.1 billion
On the face of it, JP Morgan beat analyst expectations and their own forecasts with rising revenue, net interest income, and earnings. The better-than-expected results have been largely attributed to the rise in interest rates and the acquisition of First Republic. When interest rates rise, banks can lend out at a higher rate which can sometimes boost their bottom line.
However, as interest rates rise borrowing money becomes more expensive which can see a slowdown in corporate merger and acquisition activity. This is because many mergers involve borrowing money to facilitate the purchase. This has been highlighted by the lower investment bank and corporate revenue and profit.
JP Morgan has also bucked the trend by benefiting from the rate environment. Smaller banks have seen their net interest income fall due to higher rates. However, in the earnings call, CEO Jamie Dimon and CFO Jeremy Barnum did highlight the uncertainty around the US regulators' push for banks to increase capital levels to at least $100 billion in assets which for JP Morgan would require another $50 billion capital.
The uncertainty around the direction of future interest rates may begin to weigh on JP Morgan's share price. Another concern is the global macroeconomic environment. Financial stocks can be heavily influenced by global events. Therefore, tracking market sentiment around global macroeconomic events is important as this can also influence share prices on top of company fundamentals.
JP Morgan Stock Forecast - What do the Analysts Say?
According to analysts polled by TipRanks for a JP Morgan stock forecast in the past 3 months, there are currently 14 buy, 5 hold and 0 sell ratings on the stock. The highest price level for a JP Morgan stock forecast is $215.00 with the lowest price target at $150.00.
The average price target for a JP Morgan stock forecast is $171.05.
An Example Trading Idea for the JP Morgan Stock Price
An example trading idea for the JP Morgan share price could be as follows:
- Buy the stock on a break above the post-earnings high at $153.25 to allow for volatility.
- Target just below the highest analyst price target of $215.00.
- Keep your risk small at a maximum of 5% of your total account.
- Time Line = 1 – 6 months
- If you buy 10 JP. Morgan shares:
- If target is reached = $617.50 potential profit [($215.00 - $153.25) * 10 shares].
Remember that markets go up and down and it is unlikely the share price will move up in a straight line. In fact, it may even go much further down before it rises, especially considering the uncertain interest rate environment and current global macroeconomic events.
Be sure to exercise good risk management and always know how much you could potentially lose on a trade and the risks involved, as well as the costs.
With the Admirals Invest.MT5 account you can buy and sell US stocks with a commission from $0.02 per share. This means buying 10 shares in JP Morgan stock would result in a commission of $0.20 ($0.02 * 10 shares) for executing a per-side transaction.
There is a low minimum transaction fee of $1. So, the example trading idea above would result in a commission of just $1 overall!
How to Buy JP Morgan Stock in 4 Steps
With Admirals, you can buy shares in companies like JP Morgan with a low commission of just $0.02 per share and a low minimum commission of just $1 on US stocks.
- Open an account with Admirals to access the dashboard.
- Click on Trade on one of your live or demo accounts to open the web platform.
- Search for your stock in the search window at the top right to view the live price chart.
- Click Create New Order from the bottom of the screen to open the trading ticket.
Click on the banner below to trade JP Morgan stock today! ▼▼▼
Do You See the JP Morgan Stock Price Moving Differently?
Remember that all analytics and trading ideas are based on the personal view and experience of the author.
If you believe there is a higher chance JP Morgan share price will move lower, then you can also trade short from a CFD (Contracts for Difference) trading account which Admirals also provide.
This means you can trade long and short to potentially profit from rising and falling stock prices.
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