How Much Is JPMorgan Stock Really Worth?

• JPMorgan Chase & Co JPM shares have recovered from their January 15 low of $54.99, although they are still down 3.55 percent year-to-date.
• Credit Suisse’s Susan Roth Katzke maintained an Outperform rating on the company, with a price target of $75.
• The company’s consumer banking segment is poised for robust revenue growth and improved operating efficiency, Katzke believes.

Meetings with JP Morgan Chase’s Consumer Banking CEO Barry Sommers revealed that the segment is poised for robust revenue and earnings growth. This segment accounts for nearly 15 percent of the company’s forecasted earnings.

Analyst Susan Roth Katzke said that the company is targeting above-average deposit growth, besides planning to make continued investments in new branches and consumer banking technology. She expects the company’s revenue growth to be driven by an expanded customer base, deeper relationships and the Chase Private Client strategy.

“Combined with its investment in mobile banking and payments technology, this ought to, by our estimate, drive revenue growth ~200bps in excess of GDP growth; higher interest rates would add to revenue momentum (more value to core deposits),” Katzke wrote.

JPMorgan Chase’s operating efficiency is expected to improve from the company’s migration to digital, rationalization of its branches and operating centers and automation. The Credit Suisse report added, “Sustained share price outperformance relies on continued above average ROE generation and progress in GSIB score optimization with a manageable revenue impact.”

JPMorgan Chase’s shares have the potential to trade at “1.2x year end 2015 book value” consistent with its ROE/ROTEs, Katzke said.