JPMorgan Chase (NYSE:JPM) share price is up 29% over the past twelve months thanks to extraordinary top and bottom line results.
Having run so far so fast the big question now for shareholders is whether the rally is over, or is it just a brief pause before JPMorgan stock resumes its march higher?
Banking Fees & Revenues Soar
First-quarter earnings were stellar after management posted strong net income and earnings per share growth. They also announced an 8% rise in revenue, with investment banking fees up 12% and equity markets revenue up 48%.
Even with these impressive numbers in the rearview mirror, the share price tumbled by 13% in February when the broader market ran into a brick wall and keeled over.
As a result, management assessed the odds of a recession at a coin toss, 50-50, cautioning that the economy is experiencing significant turbulence, citing fears of trade wars, ongoing inflation, and budget deficits. So does this warning mark the end of JPM’s rally?
7.1 Billion Reasons to Buy JP Morgan
Management reported good Q1 2025 figures thanks to rising EPS and net income on a year-over-year basis.
Net managed revenue increased 8% from the same period a year ago to $46.0 billion. The Board of Directors also authorized the buyback of $7.1 billion worth of stock and raised its dividend by 12%. Adjusted earnings per share came in at $4.91, roughly $0.27 more than estimates.
Strong Q1 results led to a share price rally to the tune of 4%, far eclipsing the market’s performance.
Jamie Dimon’s firm bested first-quarter profit forecasts thanks to record equities trading and increased fees from debt underwriting and merger advising. The strong performance prompted a revised revenue forecast, with JPMorgan estimating quarterly revenue of $44.14 billion, compared to $41.93 billion in the same period last year.
Looming Recession Is Major Uncertainty
The bank’s provision for credit losses rose to $3.3 billion from $2.6 billion for the fourth quarter while the consumer banking unit reported that the 30-day delinquency rate for home lending increased to 1.04% from 0.78% for the fourth quarter.
CEO Jamie Dimon warned on Wednesday that escalating U.S.-China trade tensions have significantly increased the possibility of a recession.
JPMorgan Chase share price traded flat on the month as Dimon emphasized national security worries in his shareholder letter last year, declaring “we failed to protect our national security, becoming too dependent on potential adversaries for vital products that the military requires.”
This puts into perspective wider issues that may affect the financial system. JPMorgan now estimates that there is a 60% probability of a recession following tariff increases.
Technicals Paint a Cautious Picture
The consensus view among analysts is that fair value sits at $258.80 per share, meaning there is ballpark 15.4% room to pop from here.
That’s the fundamental view but technical analysis reveals a less rosy picture. Simple Moving Averages and oscillators all point to risk and resistance up above.
Based on current momentum and moving averages, the technical outlook for JPMorgan Chase is mixed.
Rock Solid Balance Sheet But Is It Enough?
JPMorgan’s action to bolster its provision for credit losses amid otherwise strong quarterly results was “a respect for the unknown economy ahead and good capital allocation.”
Wall Street analysts and the company regularly call the company’s “fortress” balance sheet a nod to the savvy risk-taking by Dimon.
Both Jamie Dimon and Larry Fink at BlackRock indicated that the volatility was not like it had been before in previous financial crises.
Two days after President Donald Trump’s executive order ordering a 90-day delay of higher tariff rates for most nations but not China, Dimon warned that the “economy is facing substantial turbulence,” as concerns about trade wars, entrenched inflation, and fiscal deficits ran high.
In spite of these worries, financial stocks climbed with a wider U.S. equity market rally as March inflation data cooled off and banks initiated the quarterly earnings period.
Two days after President Donald Trump announced a 90-day reprieve on higher tariff levels for the majority of countries other than China, JPMorgan Chase CEO Jamie Dimon issued a more ominous warning that the “economy is facing considerable turbulence,” citing fears of trade wars, ongoing inflation, and budget deficits.
Is the JPM Rally Over?
While the positives driving the recent JPMorgan rally persist, compelling reasons for a serious downside exist. The continued threat of recession, trade tensions, and market volatility mandate caution. From the analysis, the recent JPM rally could be taking a breather, but by no means is there any certainty a rally will materialize.
Though the strong fundamentals and good outlook imply a “buy” rating, technical signals and recessionary headwinds warn that the stock is more fairly rated as a Hold. Hang tight for the news to play out with greater certainty before diving in at the deep end of the pool is the takeaway.
A short-term pullback may is likely a buying opportunity but it’s clear as day now that uncertainty rules the roost and there’s no reason to get too aggressive too soon.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.
