Limited upside! Baird analyst recommends selling JPMorgan (JPM.US)

JPMorgan Chase (JPM.US) shares fell 4.27% after an analyst suggested clients sell the stock, saying it had become too expensive after hitting a record high.Baird analyst David George wrote in a note that while JPMorgan has "scale, skills and dominant market share" in its business areas, the balance of risk and reward was not attractive at current prices, and "we recommend investors take profits."JPMorgan's shares hit a record high on Wednesday, helping to drive a surge in the banking sector, lifting the shares of both large and regional banks as well as private equity firms and payment companies.Investors were buoyed by the prospect of a more friendly regulatory environment under a Trump re-election, driving a surge in large financial exchange traded funds. JPMorgan's shares rose 11.5% on Wednesday, their biggest one-day gain since November 2020. But they fell 4.5% on Thursday, while the S&P 500 rose 0.8%.Despite optimism about a more relaxed regulatory environment and a more growth-oriented macroeconomic agenda, Baird sees limited upside for JPMorgan shares.George noted that the stock trades at about 2.6 times tangible book value, a measure that strips goodwill and mainly gauges the intrinsic value of a company. It also trades at more than 14 times estimated earnings per share in 2026. George also reminded investors that JPMorgan said it would not buy back stock at current prices in recent quarters.Jamie Dimon, JPMorgan's chief executive, was blunt in his remarks at an investor day in May: "To be clear: we will not buy back stock at these levels. We don't see stock buybacks as returning cash to shareholders, but rather funding exits. We'd rather support existing shareholders."George wrote in a Wednesday note that while an improvement in the regulatory environment could bring potential capital relief, management's appetite for stock buybacks may not match market expectations.