JPMorgan could reach $1 trillion market value by 2030, says Morgan Stanley

JPMorgan Chase & Co.’s market capitalization has a chance to more than double and hit $1 trillion by 2030, according to Morgan Stanley analysts, reinforcing its position as the most valuable US bank.
 

In the event of a so-called soft landing for the economy where interest rates stay higher for longer, America’s biggest lender stands to benefit from stronger net interest income, plus improved fees and efficiencies, Morgan Stanley’s Betsy Graseck wrote in a note. The stock is “an underappreciated rate play,” she said.

Graseck sees the $1 trillion market-value landmark being reached in 12 years’ time if interest rates remain elevated, but says it could get there in eight if the bank takes steps to become more efficient, accelerates revenue growth or achieves a premium earnings multiple. JPMorgan is currently valued at $411 billion after a 4% gain in the stock so far this year.

Shares of the lender fell about 0.7% in premarket trading Friday morning, putting the stock on track to close lower by more than 2% this week. 

A market value of $1 trillion would put JPMorgan in elite company, not only among its US peers, but globally. Only four stocks — Apple Inc., Microsoft Corp., Saudi Aramco and Alphabet Inc. — currently sport valuations that exceed that level. PetroChina Co. briefly became the first publicly traded stock to clear the $1 trillion milestone back in 2007, while Apple became the first US stock to do it in 2018.

Graseck’s optimism contrasts with often cautious comments from JPMorgan’s Chief Executive Officer Jamie Dimon, who said on Thursday that the economy has “some scary stuff” to face. The bank said last month that it expects an economic slowdown to weigh on net interest income this year.

Her price target on the stock, which she boosted to $173 from $167, implies a 24% gain over the next 12 months from Thursday’s close. That’s nearly double the average annual move that JPMorgan shares have seen over the last decade and would put the stock at a fresh all-time high.