JPMorgan Shares Soar After Company Announces Big News

Shares of JPMorgan Chase were popping on Monday after the bank revealed that it would be reaching a key returns target earlier than planned.

The bank said that a 17% return on tangible common equity “remains our target and may be achieved in 2022,” according to the lender’s presentation.

This is exciting news to Wall Street as earlier this year CFO Jeremy Barnum had warned that headwinds, including rising costs, would cause the bank to miss its target for the next one to two years.

The bank’s shares started to fall in January after it revealed an unexpected jump in fourth-quarter expenses and management said that it would likely miss its 17% target for returns.

“This issue is certain to us: front-loaded spending for less certain back-ended benefits,” veteran bank analyst Mike Mayo wrote in a January note.

He had also cut his recommendation on JPMorgan shares.

“There’s a very good chance this year” of hitting the target and exceeding it next year if there’s a “benign” credit environment, CEO Jamie Dimon told investors Monday in opening remarks for the company’s Investor Day meeting.

Shares were up over 6% on the news and this was the first Investor Day for JPMorgan since 2020.

The bank also said that while guidance around 2022 expenses was unchanged at about $77 billion, rising interest rate expectations as the Federal Reserve combats inflation may be proving a boost.

The company additionally said net interest income in 2022 could exceed $56 billion, well above the $50 billion estimate given in January.

By the fourth quarter, JPMorgan will generate net interest income at a $66 billion annual clip, more than $20 billion higher than the 2021 level, on higher rates and loan growth.

Apart from Dimon and his CFO, division heads including Daniel Pinto, Marianne Lake and Jennifer Piepszak gave presentations on Monday as well.

Executives announced several new product offerings, from installment loans to better compete with buy now, pay later players to a new remote wealth management offering called JPMorgan Personal Advisors.Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.