JPMorgan (JPM) Lifts '24 NII View, Discusses Succession Plan

The expectation of fewer interest rate cuts seems to be a boon for JPMorgan JPM. The company now projects net interest income (NII) for 2024 to be nearly $92 billion, up from the prior target of approximately $90 billion. Other than lesser rate cuts, "better-than-expected reprice and migration performance” also drove the NII guidance.

JPMorgan announced this and a few other updated/new targets at the Investor Day conference yesterday. The top management also discussed the succession plan and the role of AI in the current environment.

In contrast, other major regional banks, including Wells Fargo WFC and Citigroup C, anticipate NII to decline this year. WFC expects the metric to fall in the range of 7-9% from the 2023 reported figure of $52.4 billion. Likewise, C projects NII (excluding Markets NII) to be down modestly in 2024.

Apart from NII, JPM now expects adjusted non-interest expenses to be almost $92 billion, an increase of $1 billion from the prior guidance. The company also lifted its technology budget for this year. It plans to spend roughly $17 billion on technology, up 9.6% year over year.

The top executives, as well as the CEO Jamie Dimon, discussed the potential that AI represented for the company. Dimon stated, “I think it's gonna change every job, like, every job.”

Additionally, Daniel Pinto, JPM’s chief operating officer, noted that $1-$1.5 billion has been assigned to AI use cases that have been identified in the areas of customer service, trade and operational efficiencies and fraud management.

Further, despite using AI and other tech upgrades, JPMorgan remains on track to increase its brick-and-mortar footprint. Last year, the company, which already has a presence in all 48 states in the United States, announced plans to open more than 500 new branches by 2027. The company also is committed to renovating 1,700 existing locations by 2027-end to serve its customers better.

Another important topic of discussion was Dimon’s future plans. For the past few years, he has been dodging questions related to his plans to retire, with statements like he is going to stay in the job for another five years. But this time, Dimon said, “not five years anymore.”

Being one of the longest-serving CEOs of a major global bank, this statement drew investors’ attention, and the company shares closed 4.5% lower. JPMorgan recently made several changes at the top level, and there are a few potential contenders who could step in once Dimon plans to retire.

Under Dimon, JPM has successfully navigated the 2008 financial crisis and the recent regional banking crisis. Since Jan 1, 2006, when he became the CEO, the company’s shares have skyrocketed 392.7%. In comparison, the industry and the S&P 500 index have surged 27.4% and 355.6%, respectively.
 

Zacks Investment Research
Image Source: Zacks Investment Research

At present, JPMorgan carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Buy 5 Stocks BEFORE Election Day

Biden or Trump? Zacks is releasing a FREE Special Report, Profit from the 2024 Presidential Election (no matter who wins).

Since 1950, presidential election years have been strong for the market. This report names 5 timely stocks to ride the wave of electoral excitement.

They include a medical manufacturer that gained +11,000% in the last 15 years… a rental company absolutely crushing its sector… an energy powerhouse planning to grow its already large dividend by 25%... an aerospace and defense standout that just landed a potentially $80 billion contract… and a giant chipmaker building huge plants in the U.S. 

Don’t Wait. Download FREE >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Wells Fargo & Company (WFC) : Free Stock Analysis Report

JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report

Citigroup Inc. (C) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.