Is JPMorgan Chase Stock a Buy 8% Below Its Record High?
Key Points
In a rare occurrence, JPMorgan Chase’s Q3 revenue and earnings per share missed analyst estimates.
The company raised full-year guidance for net interest income.
While the bank stock’s valuation is above its peers', its return on tangible common equity is significantly higher.
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Investors view JPMorgan Chase (NYSE: JPM) as one of the highest-quality financial services institutions. It has its hands in all parts of the industry, from consumer, small business, and commercial banking to capital markets and asset management activities. With $5.1 trillion in total assets, it has massive scale. CEO Jamie Dimon, who has led the charge for almost 21 years, is also highly regarded in the corporate world.
As of Oct. 15, the bank stock traded at $335.53. This was 8% below its record close of $365.18 on Aug. 12, 2026. Is it time to buy the dip on JPMorgan Chase?
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Missing the mark
During the three-month period that ended Oct. 31, which marked the company's third quarter, JPMorgan Chase reported strong headline metrics. Net revenue climbed 8% year over year to $50.2 billion. Diluted earnings per share rose 10% to $5.57. At a high level, this is encouraging.
However, these two figures came in below Wall Street analyst expectations. To find the last time the business missed on the bottom line, you'd have to go all the way back to second-quarter 2022.
Investors shouldn't run for the exits, though. JPMorgan Chase is still operating from a position of strength. Revenue from equities markets activities surged 49% compared to Q3 last year. Investors should expect this level of growth to moderate eventually, although the momentum is noteworthy.
Despite the Federal Reserve engaging in tighter monetary policy, JPMorgan Chase saw average loans jump 10% year over year. Average deposits were up 8%.
Management raised guidance for net interest margin (excluding markets) by $700 million compared to three months ago. They now expect this figure to come in at $97.2 billion for the full year. This was encouraging, especially since the company didn't increase its forecasted card services net charge-off rate.
Worth the quality
At the current price, I believe JPMorgan Chase deserves a closer look from investors seeking quality businesses. The valuation, at a price-to-book ratio of 2.5, represents a sizable premium to its direct peer group that includes Bank of America, Wells Fargo, and Citigroup. While this isn't a bargain opportunity, the valuation might be justified.
JPMorgan Chase's 20% return on tangible common equity is significantly higher than these three rivals'. According to consensus analyst estimates, its book value per share is projected to grow at a faster clip from 2025 to 2028.
Investors also benefit from capturing a dividend yield of nearly 2%. That's a healthy income stream that makes it easier to be patient, and it can add to the stock's total return.
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Wells Fargo is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. Citigroup is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.
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