Framework Convergence
Bull / Bear Assessment
Buffett Signal
Meets Buffett's quality criteria but projected return of 11.3% is below the 15% minimum threshold. JPM is a well-managed financial fortress, but banking lacks the consumer monopoly moat Buffett prefers.
Intrinsic Value Calculation
📍 Current Price: $341.10 — IN HOLD ZONE (above intrinsic value $302.17)
Durable Competitive Advantage
Assessment: JPM is NOT a textbook consumer monopoly — banking is inherently commodity. However, JPM has built the closest thing to a moat: #1 in investment banking, #1 in credit cards (Chase), #1 in AUM, largest US bank by assets.
Moat Sources: (1) Too-Big-to-Fail implicit guarantee, (2) Network effects in payments, (3) $17B annual tech spend, (4) Brand trust, (5) Cross-selling, (6) Regulatory moat — compliance costs block new entrants.
Buffett's Concern: Banks are commodity businesses with credit cycle risk and leverage. JPM at 14.64x P/E is not distressed — Buffett prefers to buy banks at crisis prices.
Key Metrics
IRR: $23.30 ÷ $341.10 = 6.83% — EXCEEDS 5% minimum. For every $100 invested, $6.83 in earning power.
CAGR: All metrics below 15% (EPS 11.8%, Revenue 8.7%, NI 10.9%). Banks grow slower than tech but more predictably.
Balance Sheet — Fortress
CET1 at 15.2% vs. 10.5% required = 470bps buffer (~$50B dry powder). Could withstand severe deposit flight scenarios that destroyed SVB and First Republic.
Capital Returns & Cash Flow
FY2025: $17B dividends + $12B buybacks = $29B total capital return (51% of earnings). P/E well below 40x threshold — reasonable multiple for quality bank.
Buffett Scorecard
Score: 8 PASS / 3 FAIL / 1 CAUTION — Quality bank at fair price, not a bargain.
← Main Page Análisis Graham Buffett Sowell Metodología About
JPMorgan Chase & Co. (JPM)
Security Analysis — Benjamin Graham Method
6th Edition Framework • July 2026
⚠️ SPECULATION (BY PRICE) Excellent company, but current price exceeds Graham's investment value thresholds
GRAHAM INTRINSIC VALUE THERMOMETER
◄ BARGAIN ≤$103.79INVESTMENT $103–$155SPECULATION $155–$249OVERVALUED ► >$249
▼ CURRENT PRICE: $341.10 — OVERVALUED ZONE ▼
Investment vs. Speculation Classification
At $341.10, JPM trades at 27.4x its 10-year average EPS of $12.46 — well above Graham's maximum 20x threshold. JPM's earning power has grown dramatically in recent years (TTM EPS $23.34 vs 10yr avg $12.46), indicating the 10-year average is depressed by earlier structurally lower earnings years.
[Source: EPS data from macrotrends.net, accessed Jul 19, 2026; Price from stockanalysis.com, Jul 17, 2026]
Decomposition: Investment Component: $155.69 (12.5x × $12.46) | Speculative Component: $185.41 (54.4% of price)
CLASSIFICATION: SPECULATION (BY PRICE) — Company quality is exceptional, but price exceeds Graham investment standards
Earning Power Analysis (10-Year Record)
Year Diluted EPS Net Income ($M) YoY Change
2016 $6.19 $22,834 +1.2%
2017 $6.31 $22,567 -1.2%
2018 $9.00 $30,709 +36.1%
2019 $10.72 $34,642 +12.8%
Income Statement Deep Dive
Revenue (TTM Jun 2026): Net Interest Income $99.8B (50.1%) + Non-Interest Income $99.6B (49.9%) = ~$199.4B total net revenue. Exceptionally balanced mix provides natural cycle hedging.
Non-Recurring (2024): $7.9B Visa gain + $1.0B Foundation contribution. Normalized 2024 revenue ~$169.7B. Q2 2026 also had $4.6B one-time gains.
[Source: stockanalysis.com; JPM Financial Highlights 2024 PDF; Q2 2026 press release from jpmorganchase.com]
PASS — Revenue diversified, durable, identifiable. Non-recurring items properly disclosed.
Balance Sheet Analysis
Capital (FY2024): CET1 15.7% | Tier 1 16.8% | Total Capital 18.5% | LCR 113%
Book value grew 52% in 3.5 years ($90.29 → $137.18). For a bank earning 17.8% ROE, premium to book is justified by earning power — but Graham would still prefer closer to book.
[Source: JPM Financial Highlights 2024 PDF; stockanalysis.com balance sheet, Jul 19, 2026]
CAUTION — 2.49x P/B is elevated. Justified by high ROE but offers limited asset-value protection.
Debt and Financial Structure
Total Assets: $4.42T | Equity: $362.4B | Leverage: ~12.2x (normal for G-SIB)
CET1 at 15.7% provides ~$50B+ excess capital above regulatory minimums. Passed every Fed stress test since inception. Among highest-rated institutions globally.
[Source: jpmorganchase.com/ir/fixed-income; stockanalysis.com; Financial Highlights 2024]
PASS — Conservative for a bank. Excess capital, top-tier ratings, stress test proven.
Intrinsic Value Calculation
Method 1 (10yr Avg × Multiplier): Conservative $124.55 | Normal $155.69 | Maximum $249.10
Method 2 (5yr Avg × Multiplier): Conservative $166.90 | Normal $208.63 | Maximum $333.80
Method 3 (Normalized Current ~$21 × Multiplier): Conservative $210 | Normal $262.50 | Maximum $420
$155.69 — $262.50 — $420.00
Conservative ←→ Fair Value ←→ Optimistic
Comparative Analysis
Bank Market Cap P/E Notes
JPM $906.7B 14.64x Highest ROE, premium justified
BAC $434.8B 14.05x Similar valuation, lower quality
GS $314.2B 16.44x Higher P/E, more volatile earnings
WFC $267.8B 12.48x Discount reflects past issues
C $220.6B 12.61x Restructuring discount
Qualitative Factors
Business Stability: Diversified banking (Consumer, Commercial, IB, Asset Mgmt) — multiple uncorrelated revenue streams. ✅
Competitive Position: #1 globally in IB revenue, #1 US deposits, #1 credit card volume. Near-monopolistic moat. ✅
Management: Jamie Dimon 20yr tenure — BVPS compounded from ~$33 (2005) to $137 (2026). 15% CAGR. ✅
Regulation: Heavy but PROTECTIVE (barrier to entry). G-SIB surcharge rising to 5.2% by 2028. ⚠️
Key Person Risk: Dimon (age 70) — succession is the single largest qualitative risk. ⚠️
[Source: JPM Q2 2026 earnings call; JPM IR page; Fool.com May 2026]
Dividend and Shareholder Policy
Total Shareholder Yield: 5.32% (1.76% div + 3.57% buyback). Book value grew 52% in 3.5 years while paying dividends AND buying back 10%+ shares. Each retained dollar produced well over $1 of market value.
[Source: stockanalysis.com; marketbeat.com Jul 13, 2026; 247wallst.com Apr 14, 2026]
PASS — Exemplary capital allocation. Conservative payout, aggressive buybacks, growing book value.
Warning Signs
No Manipulation Detected: Tax rate consistent (22.5%), non-recurring items disclosed, reserves adequate ($26.2B for $1.54T loans), goodwill stable ($64.5B, <2% of assets).
Risks to Monitor: G-SIB surcharge increase, rising credit costs ($13-14B annually), Piotroski F-Score of 2.
PASS — No accounting manipulation. Normal cyclical concerns manageable.
← Main Page Análisis Graham Buffett Sowell Metodología About
JPMorgan Chase & Co. (JPM)
Macroeconomic & Microeconomic Analysis
Thomas Sowell "Basic Economics" Framework • July 2026
Price signals are functioning efficiently. JPM operates as a natural monopoly with transparent pricing, aligned management, and extraordinary efficiency at scale.
Heavy factors: 3 bullish, 0 bearish | Standard factors: 5 bullish, 2 bearish | Net: ALCISTA
Critical Scarce Resources
Resource % of Cost Price Trend Substitutes Scarcity Risk
Deposits (funding) ~45% Cost rising (rate environment) Wholesale funding, bonds Low
Talent (bankers, engineers) ~30% Rising (AI talent war) Automation/AI replacing some roles Medium
Technology infrastructure ~15% Stable (declining per unit) Cloud services, outsourcing Low
Regulatory capital ~10% Rising (G-SIB surcharge) None — mandated by regulation Medium
Mapping of Leading Suppliers
Input Supplier Market Structure Distortion?
Deposits 100M+ US consumers/businesses Highly competitive No (free market pricing)
Wholesale funding Global bond markets, interbank Highly competitive Partially (Fed policy influences rates)
Technology AWS, Microsoft, custom engineering Competitive No
Talent Global labor market (finance, tech) Competitive but constrained Some (visa policies, non-competes)
Price Signals — Pass-Through Test
CRITICAL TEST — Can JPM Pass On Costs?
YES — emphatically. When JPM's input costs rise (deposit rates), its output prices rise in lockstep (loan rates) because ALL banks face the same rate environment. The entire banking sector reprices simultaneously. This is the textbook case of universal cost-pass-through.
Signal Diagnostic Current Situation Impact
Inputs (deposit costs) up Loan rates up proportionally (plus wider spread) Positive — margin expanding
Non-interest revenue Rising (+20.8% TTM) from trading/IB Positive — diversified growth
Incentives and Opportunity Cost
Investor's Opportunity Cost:
JPM Earnings Yield: 6.84% vs Risk-Free (10yr Treasury): 4.55% → Premium of 2.29% [CONFIRMED — CNBC/FRED, Jul 17, 2026]
JPM Total Shareholder Yield: 5.32% (div + buyback) vs S&P 500 ~1.3% yield
JPM TTM Return: +19.34% vs S&P 500 ~14% → Outperforming
Management Incentives:
Government Intervention & Distortions
Critical Test: Would JPM be profitable without ALL government intervention?
Intervention Type Impact on JPM Assessment
Deposit insurance (FDIC) Increases depositor confidence → more deposits flow to banks Benefits industry but NOT exclusive to JPM
Fed as lender of last resort Systemic safety net (used only in 2008) Never actually used for JPM specifically
Capital requirements (Basel/G-SIB) CONSTRAINS JPM — requires $50B+ excess capital Net COST, not benefit
Systemic Risk & Global Interconnectivity
Risk Factor Exposure Level Mitigant
US economic recession Medium (credit losses rise) Diversified globally; $26B reserves
Interest rate reversal Medium (NII would compress) 50% revenue from non-interest sources
Geopolitical (China/Russia) Low (minimal direct exposure) Revenue primarily US/Europe/Japan
Counterparty contagion Low (fortress capital, net creditor) CET1 15.7%, stress tested
Competition & Market Position
Natural vs. Artificial Monopoly Test:
If all government protection vanished tomorrow, would JPM maintain dominance?
YES — Through Superior Efficiency, Scale, and Network Effects
JPM's efficiency ratio (~55%) is best-in-class despite being the largest — scale produces efficiency, not bureaucracy
$17B annual tech investment creates capabilities smaller banks cannot match
Scale, Specialization & Efficiency
Is JPM in Economies or Diseconomies of Scale?
Still in ECONOMIES of scale — evidence:
Assets grew from $3.7T (2021) to $5.0T (Q2 2026, +35%) while efficiency ratio IMPROVED
Revenue per employee: $584,995 — extraordinary productivity [CONFIRMED — stockanalysis.com, Jul 2026]
Profit per employee: $199,785 [CONFIRMED — stockanalysis.com]
Profits, Losses, and Management
Source: Real market demand for financial services (lending, payments, advisory, trading) — NOT subsidies
Sustainability: Natural barriers (scale, brand, technology, regulation) protect margins
ROE of 17.8% on $374B equity = $66.6B annual economic value creation
Profit on INVESTMENT (ROE 17.8%) far exceeds profit on SALES (net margin 34.9% is high for a bank's structure)
Management as "Unmonitored Monitor":
Sowell Verdict — Weighted Factor Aggregation
Factor Type Factor Direction Weight
HEAVY Pass-Through Test (Phase 3) BULLISH ✅ 2x
HEAVY Natural vs Artificial Monopoly (Phase 7) BULLISH ✅ 2x
HEAVY Profits from real demand vs subsidies (Phase 5) BULLISH ✅ 2x
Standard Competitive supplier markets (Phase 2) BULLISH 1x
Standard Management skin in the game (Phase 4/9) BULLISH 1x