Quint Tatro, the founder of Joule Financial, is reducing his stake in JPMorgan Chase & Co. even though it remains his favorite bank stock.
The financial services giant announced its quarterly results on the Friday.
JPM is up by well over 20% from its year-to date low.
JPMorgan stock is now a good time to profit.
JPMorgan beat Street estimates for its fiscal Q2 due to a 52% increase in investment banking charges year-over-year. Tatro told CNBC Friday:
“While it’s certainly the best of breed, and probably the world’s best bank, I think this has already reached full valuation, and even in the most elite banks, you sometimes have to take profits.”
JPM remains attractive to income investors, however, as it pays a healthy dividend yield of 2.24%.
JPM shares are soaring on the back of good news
JPMorgan has set aside $3.05 Billion for credit losses during its recent quarter. This is a significant increase from the $2.78 Billion expected, indicating that it expects more borrowers will default in the future.
The New York-listed giant saw a very healthy consumer in its Q2 fiscal. Quint Tatro said the following on Friday’s “Power Lunch”:
“Traders are ahead of themselves, anticipating lower short rates to produce a better yield-curve and improve net interest income. But we think it’s already reflected in the price.”
CFO Jeremy Barnum confirmed that JPM had not seen any early signs of cracks within its Commercial and Industrial (C&I), loan business during the second quarter. JPMorgan’s stock is currently trading below its all-time highest.
What would it take to make JPM stock gain more?
JPMorgan Chase & Co has raised its outlook for net interest income for the full year.
The Wall Street bank has revised its forecast for 2024 to $91 billion in net interest income, up from $90 billion in April. Quint Tatro, Quint Financial’s Quint Tatro said:
“We don’t expect any further upside in the stock of JPMorgan. It would have to come out of surprises from the consumer or other parts of the bank.
JPM bought back $4.9 Billion worth of its shares in the second quarter, partly with proceeds from the $7.9 Billion sale of its Visa stake. Tatro still does not think the stock is worth buying at more that 2 times its book price.
Matthew Stucky, Northwestern Mutual Wealth Management, also lauded JPMorgan’s strong quarterly report on Friday. However, he said that investors are losing interest in JPM shares after their outperformance since 2024.
This post Quint Tatra: JPMorgan is still my favourite bank but I’m still trimming JPM could be modified as new developments unfold.
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