The Strongest Banker “A Shake of Thunder”! Is JPMorgan's stock price overvalued? （2024.05.22）

Hello, this week's Tech Tracker analyzes the most ambitious commercial bank in the US by assets — Morgan General$JPMorgan(JPM.US)$.

Hot Spot Events

US stocks rallied, while JPMorgan's share price hit all-time highs for several days in a row. However, after hitting a high of $205.88 on Monday, May 20, 2024, JPMorgan took a sudden turn, with the stock price closing down 4.5%!

What spooked the market was a comment from JPMorgan Chase CEO Jamie Dimon. “It is a mistake to buy the shares of a financial company whose market value exceeds twice its tangible assets,” the “strongest banker in the United States” said at the annual investor conference. We're not going to do that.”

IN OTHER WORDS, MORGAN GENERAL'S SHARE PRICE IS SUSPECTED TO BE OVERVALUED AND A REPURCHASE AT THE CURRENT MARKET PRICE IS UNAFFORDABLE. In addition, Damon hinted that he might retire early, which was a catalyst for the sharp fall in JPMorgan's stock price.

As a general rule, bank shares are valued at the market share ratio (PB) and the market share ratio (PE), these two related valuation indicators. Based on the data provided by Futubull, investors have a different opinion on the valuation ratio of Morgan Avenue.

The data show that JPMorgan Chase has a current PE valuation of around 12 times, fundamentally in line with other large US bank stocks. But in terms of PB valuation, JPMorgan's PB came in at 1.8 times, the highest of any bank stock and significantly higher than its peers.

Speaking of which, JPMorgan Chase has actually been repurchasing shares as planned. Therefore, Damon's comments mostly mean that the line may not add code to the repurchase in the short term, and does not mean that it will cancel the repurchase.

According to Portales Partners analyst Charles Peabody in March of this year, JPMorgan's quarterly share repurchases amount to around $20-25 billion. In comparison, the company has a current market capitalization of more than $5600 billion.

Technical analysis

Trend analysis:

Since the end of October 2023, JPMorgan's overall share price has been on a strong upward trend, up 45% through May 17, 2024. It can be seen through the gold dividing line that during this period, the stock price has only slightly adjusted, and the bull market position remains perfect.

Indicator Interpretation:

• The Boolean indicator shows that JPMorgan Chase shares have been running above the mid-track (i.e. 20-day average) for most of the time, with the mid-track providing multiple times of effective support.

• The MACD and KDJ indicators release dead fork signals, respectively, suggesting that the short line has a certain bearish tendency.

• The share price has entered the symmetric triangulation zone before continuously breaking through historical highs, which has accumulated some upward momentum for the subsequent movement.

• The $200 integer is an important psychological barrier and there is some resistance in the short term.

Direction of attention:

JPMorgan's current uptrend remains intact, but there is pressure for a short line pullback.

In the short term, look out for potential support for the 20-day average, as well as potential resistance to the $200 integer close.

This content discusses technical analysis, and other approaches, including fundamental analysis, may provide different perspectives. The examples provided are for illustrative purposes only and do not reflect the expected results.

All investments involve risk, including the potential loss of principal, which cannot guarantee the success of any investment strategy.