JPMorgan Chase & Co.’s market capitalization could 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.
Graseck, who has an overweight rating on the shares, raised her price target to $173 from $167, implying a 25% gain over the next 12 months.
JPMorgan's Market Value Dwarfs That of Other US Banks
The analyst’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.
--With assistance from Sam Unsted.
This article was provided by Bloomberg News.