On January 17, 2025, JPMorgan Chase & Co. (JPM) emerged as the top performer among the largest six U.S. banks, showcasing superior operating efficiency in their fourth-quarter results. Despite analysts predicting limited upside for JPM's stock, factors such as decreasing deposit costs and a potential easing of regulations under a second Trump administration are expected to bolster the financial sector.
As of the end of 2024, the largest U.S. banks ranked by total assets are as follows: JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley. Key performance metrics include returns on average assets (ROAA) and returns on average tangible equity (ROTCE). JPMorgan leads in ROAA, while Morgan Stanley closely follows in ROTCE.
The Federal Open Market Committee's current federal-funds rate is set between 4.25% and 4.50%, down from previous levels, which is favorable for banks as it lowers borrowing costs. Analysts are closely watching inflation trends to gauge the Fed's ability to continue reducing short-term rates, which could further benefit bank stocks.
JPMorgan's forward price-to-earnings ratio stands at 13.9, significantly lower than the S&P 500's 21.7, indicating a typical discount for bank stocks. Approximately two-thirds of analysts rate JPM a buy, although the consensus 12-month price target remains modestly above its current price.