JPMorgan Stock Has Soared. Don't Expect It to Keep Going.

Lisa Beilfuss Financials BAC JPM JPMorgan Chase Bank of America Banking Banking/Credit Financial Services Integrated Banks Brian Kleinhanzl Keefe Woods North America United States I/BAN I/BNK I/XFFX JPM M/FCL N/DJN N/WER R/NME R/US Barrons.com Barrons Blogs Wires Fortune 500 S&P 500 SPX CODES_REVIEWED Companies Financials US author Lisa Beilfuss author|Lisa Beilfuss topicid 8272 name Lisa Beilfuss extractedtext Lisa Beilfuss rank 1 codetype author code lisa_beilfuss nameformat surname_first author Lisa Beilfuss id Lisa Beilfuss barrons_display_subject BARFINANCIALS barrons_display_subject|BARFINANCIALS codetype BARRONS_DISPLAY_SUBJECT canbedisplaysubject true value BARFINANCIALS source MANUAL status modified name Financials code BARFINANCIALS co cnyc co|cnyc country US symbol JPM displayname JPMorgan Chase why about extractedtext JPMorgan Chase source FACTIVA occurs true seoname jpmorgan_chase orgtype public relevancerange high chartingsymbol STOCK/US/XNYS/JPM fcode cnyc fullextractedtext JPMorgan Chase confidence 100 subcat com relevance 85 significance prominent onlinesignificance prominent name JPMorgan Chase confidencerange high exchangeisocode XNYS codetype co code cnyc co ncnbco co|ncnbco fullextractedtext Bank of America country US symbol BAC ticker BAC displayname Bank of America confidence 100 extractedtext Bank of America source FACTIVA subcat com relevance 1 seoname bank_of_america countrycode US name Bank of America confidencerange high exchange NYSE relevancerange verylow exchangeisocode XNYS chartingsymbol STOCK/US/XNYS/BAC fcode ncnbco codetype co code ncnbco onlinesignificance prominent status modified significance prominent company JPM company|JPM name JPMorgan Chase significance PROMINENT company BAC company|BAC name Bank of America significance PROMINENT djn JPM djn|JPM significance prominent onlinesignificance prominent name JPM why about source FACTIVA occurs true fcode JPM codetype djn code jpm djn I/BNK djn|I/BNK name I/BNK why lineage source FACTIVA fcode I/BNK codetype djn code i_bnk djn M/FCL djn|M/FCL name M/FCL why lineage source FACTIVA fcode M/FCL codetype djn code m_fcl djn I/BAN djn|I/BAN name I/BAN why association source FACTIVA fcode I/BAN codetype djn code i_ban djn R/US djn|R/US significance prominent onlinesignificance prominent name R/US why about source FACTIVA fcode R/US codetype djn code r_us djn R/NME djn|R/NME name R/NME why lineage source FACTIVA fcode R/NME codetype djn code r_nme djn I/XFFX djn|I/XFFX significance prominent onlinesignificance prominent name I/XFFX why about source FACTIVA fcode I/XFFX codetype djn code i_xffx djn N/DJN djn|N/DJN codetype djn value N/DJN source DJN-CONTROL status modified inactivebydefault true name N/DJN code n_djn djn N/WER djn|N/WER codetype djn value N/WER source DJN-CONTROL status modified inactivebydefault true name N/WER code n_wer editorial-seo-id jpmorgan-chase-stock-downgrade-51575988968 editorial-seo-id|jpmorgan-chase-stock-downgrade-51575988968 first_publish_headline JPMorgan Chase Stock Has Soared. Don’t Expect It to Keep Going. first_publish_headline|JPMorgan Chase Stock Has Soared. Don’t Expect It to Keep Going. flow NWREGULAR flow|NWREGULAR codetype FLOW value NWREGULAR source MANUAL status modified name Wires code NWREGULAR flow Barrons.com flow|Barrons.com codetype FLOW value Barrons.com source MANUAL status modified name Barrons.com code online name Online title Product code Barrons.com flow Barrons Blogs flow|Barrons Blogs codetype FLOW value Barrons Blogs title Product source MANUAL status modified name Barrons Blogs code Barrons_Blogs headline JPMorgan Chase Stock Has Soared. Don’t Expect It to Keep Going. headline|JPMorgan Chase Stock Has Soared. 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Don’t Expect It to Keep Going. JPMorgan Chase Stock Has Soared. Don’t Expect It to Keep Going. JPMorgan Chase Stock Has Soared. Don’t Expect It to Keep Going.

The big run in JPMorgan stock is petering out, say analysts at Keefe, Bruyette & Woods.

JPMorgan Stock Has Soared. Don’t Expect It to Keep Going.

Analysts say the stock’s valuation is starting to look stretched.

mailto:lisa.beilfuss@wsj.com JPMorgan Chase Stock Has Soared. Don’t Expect It to Keep Going. By Lisa Beilfuss Photograph by Spencer Platt/Getty Images JPMorgan Chase stock might struggle to outperform in the coming year, analysts say.

The big run in JPMorgan Chase stock is petering out, say analysts at Keefe, Bruyette & Woods.

Shares in the bank have soared this year, gaining 38% through Monday’s close to $134.41. That’s slightly better than rival Bank of America’s (ticker: BAC) performance, and it surpasses the 25% rise in the S&P 500 over the same time frame.

Brian Kleinhanzl at KBW said he still views JPMorgan Chase (JPM) as best-in-class in terms of quality, but he thinks investors should own stocks where consensus earnings estimates have the potential to rise. He doesn’t think that is the case here.

“Looking ahead, we believe that further upward estimate revisions are needed from here in order for JPM to outperform in the coming year and our estimates are roughly in line with consensus for 2020 earnings per share,” Kleinhanzl said.

Significant earnings growth is already priced in, he said. Without earnings growth that is better than that of its peers, the stock’s valuation seems stretched, he added. JPM stock is trading at 12.6 times KBW’s 2020 estimate—near the high end for the company’s recent history.

Given the outlook, Kleinhanzl downgraded the stock. “We would look to add shares when valuations are more reasonable, and in our view a Market Perform rating is warranted.”

As for consensus expectations, analysts polled by FactSet expect JPMorgan to earn an adjusted $10.66 a share in 2020, up from the $10.31 analysts predict for 2019. That expected 3.4% earnings growth compares to expected 14% growth for 2019 versus 2018.

JPMorgan reports fourth-quarter and 2019 results on Jan. 14.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com

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