Is JPMorgan Still a Buy After Its Strong Rally?

JPMorgan Chase (JPM) has experienced a robust rally in 2025, driven by strong earnings growth and strategic advancements in digital banking. However, as the stock trades at a premium to its peers, investors must weigh its valuation metrics against long-term growth prospects. This analysis evaluates whether JPMorgan remains a compelling buy, leveraging insights from valuation models, earnings trends, and macroeconomic dynamics.

Valuation: A Premium with Room for Growth

JPMorgan's price-to-earnings (P/E) ratio stands at 15.51 as of November 28, 2025, reflecting a 16.35% increase from its 2024 level of 13.33. This valuation exceeds the banking industry average of 11.18x and its peer group average of 12.86x, suggesting investor optimism about the bank's future performance. While the premium may appear steep, the Excess Returns model indicates JPMorgan is undervalued by 14.4% based on its intrinsic value of $357.74 per share. Additionally, the bull case narrative estimates a fair value of $328.09, implying a 4.6% undervaluation despite the elevated P/E ratio.

The trailing twelve months (TTM) earnings per share (EPS) of $20.23 underscore JPMorgan's earnings resilience. Quarterly EPS for Q3 2025 rose 16% year-over-year to $5.08, with a 21.8% increase in TTM EPS compared to 2024. Analysts project a 7.29% EPS growth in 2026, from $18.10 to $19.42 per share according to mid-year outlook, further supporting the case for sustained earnings momentum.

Long-Term Growth: Digital Banking and Strategic Partnerships

JPMorgan's strategic investments in digital banking and fintech partnerships position it for long-term value creation. The bank has renegotiated data-sharing agreements with major fintech aggregators like Plaid, Yodlee, and Morningstar, transitioning from a free-data model to one that compensates JPMorgan for operational costs and security measures. This shift not only enhances revenue streams but also aligns with regulatory trends, creating a more sustainable open-banking ecosystem.

Analysts forecast stable EPS of $22.53 and a projected book value of $135.60 per share by 2026, driven by growth in wealth management, payments, and digital banking. These segments are expected to bolster fee revenue and margin resilience, even amid rising fintech competition as reported in market commentary. JPMorgan's diversified business model and technological edge further insulate it from cyclical downturns, a critical advantage in an uncertain macroeconomic environment.

Bull vs. Bear: Balancing Optimism and Caution

The bull case for JPMorgan hinges on its undervaluation relative to future earnings potential. The Excess Returns model and fair-value estimates suggest the market underappreciates the bank's growth in digital banking and fee-driven revenue. Additionally, JPMorgan's ability to navigate regulatory shifts and maintain a leading position in wealth management strengthens its long-term appeal.

Conversely, the bear case highlights macroeconomic risks, including a 40% probability of a U.S. recession in the second half of 2025, as outlined in J.P. Morgan's mid-year outlook. Rising credit loss allowances, operational costs, and a cautious investment banking outlook could pressure margins. The bearish narrative assigns a fair value of $247.02, implying a 26.8% overvaluation based on these risks according to webull analysis.

Conclusion: A Buy with Cautious Optimism

JPMorgan's valuation, while elevated, remains justified by its earnings growth, strategic fintech partnerships, and long-term growth drivers. The Excess Returns model and bull case fair-value estimates suggest the stock is attractively priced relative to its intrinsic value. However, investors must remain mindful of macroeconomic headwinds, particularly in credit and investment banking. For those with a medium-term horizon, JPMorgan's robust fundamentals and digital transformation efforts make it a compelling buy, albeit with a watchful eye on evolving market conditions.