Analysts say Democrats’ sweep of Georgia’s Senate seats, giving the party control of the chamber, augurs well for stimulus.
JPMorgan shares recently traded at $135.39, up 2.5%. They'd gained 15% in the 12 months through Wednesday.
Bank of America analyst Erika Najarian raised her rating on JPM to buy from neutral and her price target to $160 from $131.
JPMorgan "is uniquely better-positioned to benefit from these themes versus big banks we cover: a stimulus-aided comeback of the U.S. consumer, the potential return of travel and restaurant spending, and the steepening of the [yield] curve,” she wrote in a commentary.
“While JPM had a very strong trading year in 2020, we think the tailwinds are even stronger for 2021, offsetting normalization in markets revenues.” Najarian cited “credit leverage, a bottoming in quarterly [interest-rate] spread revenue, the comeback of the U.S. consumer and the return of buybacks.”
Meanwhile, Jefferies analyst Ken Usdin upgraded JPMorgan to buy from hold and lifted his price target to $152 from $110.
“Even after the ‘blue wave’ rip, ... banks’ relative price-earnings ratios remain attractive, and a case for absolute P-E expansion exists,” he wrote in a commentary cited by Bloomberg.
JPM will benefit from a “less bad” credit outlook; higher long-term interest rates; and an “eventual turn in loan growth,” Usdin said. This could generate strong deposit growth, better cost control and a resumption of share buybacks.