JPMorgan Chase & Co. (JPM) receives a weak valuation score of 36 from InvestorsObserver's analysis. Our proprietary scoring system considers the overall health of the company by looking at the stock's price, earnings, and growth rate to determine if it represents a good value. JPM holds a better value than 36% of stocks at its current price. Investors who are focused on long-term growth through buy-and-hold investing will find the Valuation Rank especially relevant when allocating their assets.
Metrics Analysis
JPM has a trailing twelve month Price to Earnings (PE) ratio of 17. The historical average of roughly 15 shows a average value for JPM stock as investors are paying fair share prices relative to the company's earnings. JPM's average trailing PE ratio shows that the firm has been trading around its fair market value recently. Its trailing 12-month earnings per share (EPS) of 8.87 justifies the stock's current price. However, trailing PE ratios do not factor in the company's projected growth rate, resulting in many newer firms having high PE ratios due to high growth potential enticing investors despite inadequate earnings.
JPM currently has a 12-month-forward-PE-to-Growth (PEG) ratio of 2.77. The market is currently overvaluing JPM in relation to its projected growth due to the PEG ratio being above the fair market value of 1. JPM's PEG comes from its forward price to earnings ratio being divided by its growth rate. Because PEG ratios include more fundamentals of a company's overall health with additional focus on the future, they are one of the most used valuation metrics by analysts.
Summary
All together these valuation metrics paint a pretty poor picture for JPM at its current price due to a overvalued PEG ratio due to strong growth. The PE and PEG for JPM are worse than the average of the market resulting in a valuation score of 36.
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