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JPMorgan recorded a revenue of $30.16 billion in Q4, which exceeded analysts’ estimates of $28.7 billion.
JPMorgan Chase & Company (NYSE: JPM) stock dropped approximately 2% to trade around $138.42 after reporting better than expected Q4 earnings results.
The American multinational investment bank announced on Friday that it recorded earnings per share of $3.79, exceeding analyst expectations of $2.62 according to a survey by Refinitiv. Notably, JPMorgan recorded a revenue of $30.16 billion, which exceeded analysts’ estimates of $28.7 billion.
Speaking during the Q4 announcement, JPMorgan CEO Jamie Dimon noted that two major fundamentals affected the results in the past three months. One, he noted the news of an effective coronavirus vaccine in the coming quarters. And two, he cited the second government’s stimulus package. JPMorgan ostensibly released $2.9 billion from cash reserves that is set aside for expected loan defaults in the quarter.
“While positive vaccine and stimulus developments contributed to these reserve releases this quarter, our credit reserves of over $30 billion continue to reflect significant near-term economic uncertainty and will allow us to withstand an economic environment far worse than the current base forecasts by most economists,” Dimon said in a statement.
Notably, JPMorgan reported profits of $12.1 billion in the past three months, closing the year in a positive note. However, Dimon noted that the bank does not consider the $2.9 billion reserve takedown as recurring profits.
JPMorgan and Its Performance in Q4
Reportedly, JPMorgan is expected to conduct share buybacks to keep its market steady. Notably, the bank announced last month that it will partake in a $30 billion share buyback. Investors and analysts will be closely monitoring the program in respect to the company’s growth during the pandemic. Additionally, JPMorgan investors will closely be monitoring if the bank will announce a new CEO as Dimon has reported health complications.
Market data provided by MarketWatch indicates that the bank has a reported market valuation of approximately $430.31 billion with 3.05 billion outstanding shares.
Notably, JPMorgan shares jumped approximately 2.86% last year, but has managed to add over 38% and 17% in the past three months and one month respectively. Having been rated 28 times, JPMorgan received an average of Over rating.
The bank significantly benefited from business diversification during the pandemic as its revenues were not heavily impacted as noted in other sectors. Notably, JPMorgan as of last year was reported to have over $3.37 trillion in assets under management. On the other hand, its investment and corporate bank arm holds $27.447 trillion in assets under custody. JPMorgan hedge fund unit has over $45 billion in assets under management.