JPMorgan Chase (JPM) - Get Report shares on Monday were downgraded to neutral from buy at Buckingham Research, which said the banking giant has posted "best-in-class top-line growth and returns in recent years" but is now expensive relative to its peer group.
But the analyst said "we still view JPMorgan as an attractive story for long-term holders, given its above-average growth prospects, increasing scalability and operating leverage via technology, and not overly expensive valuation on an absolute basis."
Buckingham affirmed its $122 target price on the stock, which on Monday was trading down 0.9% at $119.10.
JPMorgan shares have doubled in the past five years, against the median 30% increase for peers, Mitchell said.
It trades at 11.6 times estimated earnings per share for the next 12 months, 28% above the median of its peers at 9.1 times.
JPMorgan Chase stock at its current level provides a 3.1% dividend yield.
["Investors] continue to underestimate JPMorgan's long-term opportunities for market-share and efficiency gains, particularly within" the consumer sector, Mitchell wrote.
The "digital transformation of the banking industry and the large banks' efforts to leverage their sizable scale advantages -- one-stop shopping, convenience, and investment heft" -- are "still [in] the early days," he said.
"This should provide a long-term tailwind for JPMorgan with respect to" acquiring more customers -- "new geographic expansion via digital banking could add 80 million consumers to [its] target market -- and cost savings via automation."
Among the banking-major peers, Bank of America fell 1% to $29.87, Goldman Sachs eased 1.1% to $217.58, Morgan Stanley dropped 1.2% to $44.60 and Wells Fargo slipped 0.8% to $48.56.