Based on the provided data and recent market analysis, here's a comprehensive evaluation of JPM's valuation:
Current Market Position
JPM is currently trading at $264.24, showing a -0.96% decline in the last regular trading session. The stock has gained approximately 15.4% year-to-date, outperforming both its industry (13.4% gain) and the S&P 500 (3.9% gain).
Valuation Metrics Analysis
- P/E ratio: 10.48x (2023) vs 11.10x (2022)
- EV/EBITDA: 7.95x (2023) vs 8.04x (2022)
- P/B ratio: 1.63x (2023) vs 1.49x (2022)
- Price/Sales: 3.23x (2023) vs 3.12x (2022)
Key Overvaluation Indicators:
- Trading at 2.4x tangible book value, significantly above its decade average of 1.5x
- CEO Jamie Dimon explicitly stated the stock is too expensive, noting "Buying back stock greatly in excess of two times tangible book is a mistake"
- Current valuation shows a premium compared to peers - Wells Fargo and Bank of America trade at 1.63x and 1.58x tangible book value respectively
Performance Metrics:
- ROE increased to 16.89% in 2023 from 13.69% in 2022
- Net margin improved to 31.97% in 2023 from 29.48% in 2022
- Net income grew to $47.76B in 2023 from $35.89B in 2022
Market Sentiment:
The consensus among 24 analysts is "Moderate Buy" with:
- 13 Strong Buy
- 2 Moderate Buy
- 8 Hold
- 1 Strong Sell
Conclusion: JPM is currently overvalued based on multiple factors:
- Historical valuation metrics
- Management's own assessment
- Peer comparison
- Technical indicators showing overbought conditions
The stock's premium valuation, while partially justified by its strong performance and market leadership, suggests limited upside potential in the near term.