Should You Buy JPMorgan Chase's Stock at an All-Time High?

Reuben Gregg Brewer, The Motley Fool

Sun, Mar 9, 2025, 1:20 AM 4 min read

JPMorgan Chase (NYSE: JPM) is the amalgam of 2 iconic names successful the concern industry. The institution is good respected and has been executing well. But is that capable of a crushed to bargain the stock?

Considering that, astatine the moment, the marketplace is pricing successful what seems to beryllium a cleanable show successful the future, astir investors volition privation to deliberation doubly earlier jumping in. Here's a look astatine the occupation with JPMorgan Chase's banal today.

JPMorgan Chase is simply a concern company. That's the champion mode to picture it due to the fact that its concern touches connected respective important segments of the industry. For example, it owns a ample slope that services consumers and businesses. It besides operates an concern bank, which helps companies rise capital. And it operates a wealthiness absorption business, which handles the details of idiosyncratic investing for affluent clients. That fundamentally touches connected each of the large concern lines successful the concern manufacture with the objection of insurance.

The astir $700 cardinal marketplace headdress fiscal elephantine has been performing beauteous good of late. For example, successful the last 4th of 2024, JPMorgan Chase's gross roseate 11% twelvemonth implicit year. It accrued net by 58%. And instrumentality connected equity roseate to 17% from 12% successful the anterior year. There is simply a crushed wherefore investors person been pushing the banal terms up.

And that's wherever things get absorbing if you are looking astatine JPMorgan Chase today. The banal has pulled backmost a small from its caller highs, but it is inactive up astir 28% implicit the past year. That's much than doubly the summation of the S&P 500 scale (SNPINDEX: ^GSPC). Investors are pricing successful a batch of bully news.

For dividend investors, it is notable that JPMorgan Chase's astir 2% dividend output is adjacent the debased extremity of its 10-year range. That suggests a premium terms tag contiguous and should springiness income investors pause. However, dividend output is simply a little communal valuation tool.

Looking astatine much communal valuation metrics backs up the valuation concerns highlighted by the dividend yield. For example, JPMorgan Chase's price-to-sales (P/S) ratio is presently sitting astatine astir 4.25 times versus a five-year mean of astir 3.3 times. The price-to-earnings (P/E) ratio is up astir 12.5 times compared to a semipermanent mean of astir 11 times. And price-to-book worth (P/B) is simply a spot supra 2.1 times close present versus a five-year mean of astir 1.6 times.

The P/E ratio spread is the smallest of this radical of valuation tools, suggesting lone humble overvaluation. But the P/S and P/B ratios are some materially supra their longer-term averages. And past you person to see that the existent banal terms is wrong 10% of its all-time highs astatine the clip of this writing. This is astir decidedly not a banal that is connected sale.