JPM
The premium is still doing push-ups
JPMorgan Chase put up record Q2 results, and the market’s favorite dinner-table debate is back: does a premium price-to-book multiple still make sense when the bank keeps acting like the class valedictorian?
The answer from this note is basically yes. JPM beat both revenue and earnings expectations, helped by strong loan and deposit growth and a 10% year-over-year increase in net interest income. That’s the kind of stuff that makes bank bulls sit up straighter in their chairs.
Book value is climbing, and that matters
Book value per share hit a fresh record of $133.01, up 9% year over year. For banks, that’s not just a nerdy accounting stat tucked away in a footnote. It’s part of the whole valuation math. If a bank keeps growing book value while also throwing off strong profits, paying a premium starts to look a lot less like overpaying and a lot more like paying for quality.
Why investors should care
Here’s the simple version:
- Stronger lending activity means JPM is still finding ways to grow in a real economy, not just a spreadsheet
- Rising deposits give it more funding muscle, which is banker-speak for “we’ve got ammo”
- Higher net interest income suggests the rate backdrop is still doing JPM some favors
- A record book value gives the stock more fundamental support if the multiple stays rich
Big picture: JPMorgan keeps doing that annoying thing great companies do — making expensive look justified.