JPMorgan has been categorised as a banking giant, and it had ~$3.74 trillion in total assets as at 30th June 2023, making it the biggest private bank globally. Presence of the banking giant spans throughout the world and mainly America, and retail and investment banking divisions of the bank are divided in 2 arms. Firstly, Chase Bank is its retail division, with its corporate, investment banking, and wealth management divisions being managed by J.P. Morgan. Therefore, retail and institutional investors always track the top stocks recommended by JP Morgan.
In comparison to some other banking names, such as The Goldman Sachs Group, Inc., JPMorgan had a strong year in 2023 in financial terms. Its shares, which continue to trade under the name JPMorgan Chase & Co., delivered a reasonable return of ~13% YTD, substantially outpacing S&P Banks Select Industry Index’s return of -11.9% returns YTD. Banking company continues to posting strong earnings, this the biggest catalyst to the significant increase in the company’s share price. Its 3Q financials exhibited that its revenue saw an increase of ~22% annually to come at $39.9 billion and profits saw 35% annual growth to $13.2 billion. Revenue growth stemmed from record high interest rates in the US, with JPMorgan’s NII crushing the analyst expectations during the quarter to sit at $22.9 billion.
The bank’s analysts cover tens and thousands of stocks in a bid to assign them ratings and price targets. Therefore, top stocks recommended by JP Morgan are always preferred by global investment managers and retail investors. With end of 2023 coming soon, investors now hope that higher interest rates might start to decline soon now.
With this in mind, we will now have a look at top stocks recommended by JP Morgan for long-term.
1. Wells Fargo & Company
It has been categorised as one of the largest banks in the US, and it has been split in 4 primary segments namely, 1) Consumer banking, 2) Commercial banking, 3) Corporate and Investment banking, 4) Wealth and investment management.
Its 3Q results were strong with net income coming at ~$5.8 billion and revenue at $20.9 billion. Revenue growth from the prior year consisted both increased net interest income and non-interest income. This was seen as the bank benefitted from higher rates and investments it continues to make in its businesses. Expenses saw a decline because of lower operating losses. While the US economy has been resilient, the banking company continues to see the impact of slowing economy with decline in loan balances and charge-offs continuing to deteriorate marginally.
In 3Q, the bank increased its common stock dividend to the tune of 17% and its CET-1 ratio came in at ~11.0%, which was ~210 basis points above the new regulatory minimum plus buffers starting in 4Q.
Net interest income went up by 8%, mainly because of the impact of increased interest rates, which was partially offset by decline in deposit balances. The net interest income saw a decline of $58 million from 2Q23 as a result of lower average deposit balances, which were partially offset by one additional day in the quarter and the impact of increased interest rates.
In this banking company, JPMorgan’s 2Q23 investment value came in at $4.3 billion.
2. Intuit Inc.
The company provides small-business accounting software (QuickBooks), personal tax solutions (TurboTax), and professional tax offerings (Lacerte).
It has released results for 1Q of fiscal 2024, in which its total revenue grew to $3.0 billion, exhibiting a rise of 15%. The company has increased its Small Business and Self-Employed Group revenue to $2.3 billion, exhibiting a rise of 18% and it saw its Online Ecosystem revenue grow to $1.6 billion, up by 20%.
QuickBooks Online Accounting revenue saw an increase of 19% in the quarter as a result of customer growth, increased effective prices, and mix-shift. Its online services revenue went up by 20% as a result of growth in payroll, Mailchimp, and payments. Decline in Credit Karma revenue during the quarter was mainly because of headwinds in personal loans, auto insurance, home loans, and auto loans. This was partially mitigated by growth in credit cards and Credit Karma Money.
The company saw total cash and investments balance of ~$2.3 billion and ~$5.9 billion in debt as at October 31, 2023. It reiterated its guidance for FY24, with revenue expected to come in the range of $15.890 billion – $16.105 billion, exhibiting a growth of ~11% – 12%. GAAP operating income is expected in the range of $3.615 billion – $3.720 billion, up by ~15% to 18%.
By the end of 2Q23, JPMorgan’s investment value was $4.8 billion.
3. Johnson & Johnson
The company, along with its subsidiaries, is engaged in researching, developing, manufacturing, and selling a range of products in healthcare field worldwide.
It delivered strong results and saw significant pipeline advances in 3Q, offering the solid foundation for sustained growth.
Analysts at the HSBC initiated the coverage on shares of the company in a report dated September 6th in which they gave a “hold” rating and the price target of $175.00 on the company’s shares. Atlantic Securities increased their price objective from $167.00 to $170.00, giving the stock a “neutral” rating on August 4th.
Leading investment firm, BlackRock Inc. increased its stake in the company by ~1.4% in 1st quarter. The company now owns ~201,491,567 shares of for the total consideration of $31,231,193,000 after purchasing additional ~2,688,798 shares. State Street Corp increased its stake in the company’s shares by ~1.1% in 2nd quarter. Now, it owns ~141,833,756 shares for the consideration of $23,476,323,000.
Conclusion
While above are some of the top stocks recommended by JP Morgan for long-term, there are several stocks on which JP Morgan holds positive stance. Some of them include, NextEra Energy, Inc., Lowe’s Companies, Inc., NXP Semiconductors N.V., etc.
JPMorgan’s CEO Jamie Dimon has been gathering a lot of media coverage lately. That’s because he made an announcement through JP Morgan about selling his shares for the first time since 2005. He owned ~8.6 million shares at the end of Oct 2023, which equates to his net worth of ~$1.3 billion.
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