JP Morgan Chase & Co.
Model against market
The past year of closing prices, with the implied value from this model drawn across it. The model line is flat because it is rebuilt from filings, not quoted.
Solid line: closing price. Dashed: implied value from this model, held at its published figure.
What the model is built on
Revenue and net margin as reported. The growth rate and margin used in the projection come from these figures, not from an estimate.
Method
This stock is valued using a Residual Income model, not DCF. Banks and other financial-sector firms don't report EBIT or CapEx in a comparable way — their income statement is Net Interest Income + Non-Interest Income less Operating Expenses & Provisions. Residual Income values the firm as Book Value plus the present value of future economic profit (Net Income minus Cost-of-Equity charge on book).
Assumptions come from the Consensus preset — peer-median operating margin, analyst-implied growth, and a 5.0% equity risk premium. The workbook contains every step, with formulas left live so the numbers can be traced or changed.
Figures
Sensitivity
Implied share price across discount rate and terminal growth. The base case sits in the centre.
| Cost of equity ╲ Terminal growth | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 7.7% | 483.12 | 402.43 | 341.97 | 295.10 | 257.78 |
| 8.7% | 507.50 | 417.79 | 351.95 | 301.69 | 262.16 |
| 9.7% | 536.56 | 435.63 | 363.31 | 309.09 | 267.01 |
| 10.7% | 571.80 | 456.59 | 376.37 | 317.44 | 272.42 |
| 11.7% | 615.44 | 481.59 | 391.53 | 326.96 | 278.50 |
Peer set
Used as a cross-check on the model output, not as an input to it.
| Company | Revenue ($bn) | P/E | P/B | P/TBV | ROE |
|---|---|---|---|---|---|
| BAC Bank of America Corporation | 113.9 | 11.7 | 1.57 | 1.85 | 11.2% |
| WFC Wells Fargo & Company | 83.0 | 10.9 | 1.62 | 1.91 | 12.6% |
| C Citigroup, Inc. | 81.7 | 10.2 | 1.15 | 1.35 | 8.5% |
| GS Goldman Sachs Group, Inc. (The) | 67.6 | 13.9 | 2.83 | 3.33 | 16.9% |
| MS Morgan Stanley | 77.8 | 15.6 | 3.15 | 3.71 | 18.0% |
This is one model with one set of assumptions, not a price target or a recommendation. Change the growth rate or the discount rate and the answer moves — which is the point. Run JPM with your own inputs or read the disclaimer.