JP Morgan Chase price breakout extends following Q2 results update

[MongiIG]

JP Morgan Chase (JPM) Q2 2023 results highlighted a strong financial performance, with net income and revenue boosted by the inclusion of First Republic Bank.

Source: Bloomberg

 

Shares JPMorgan Chase Revenue Income Price Net income

 Shaun Murison | Senior Market Analyst, Johannesburg | Publication date: Monday 17 July 2023 

JP Morgan Q2 earnings

JP Morgan Chase (JPM) Q2 2023 results highlighted a strong financial performance with remarkable growth in net income, net revenue, and net interest income. Despite facing increased noninterest expenses and credit losses, the company's overall financial health remains robust.

Salient features of the results are as follows:

• Net income for the period was $14.5 billion, marking an increase of 67% compared to the prior year’s comparative period. Excluding First Republic, net income still rose by a substantial 40%.
• Net revenue also witnessed a notable growth of 34%, reaching $42.4 billion. Excluding First Republic, the growth was still considerable at 21%.
• Net interest income (NII) experienced an increase of 44% to reach $21.9 billion, driven primarily by higher rates. Excluding First Republic, NII still grew by an impressive 38%.
• Noninterest revenue grew by 25%, amounting to $20.5 billion. Excluding First Republic, the growth was 6%. This increase was mainly driven by higher noninterest revenue from CIB Markets and the absence of certain prior-year losses in Payments. However, it was partially offset by higher net investment securities losses in Corporate.
• Noninterest expenses rose by 11% to $20.8 billion. Excluding First Republic, the increase was 8%. This growth was primarily due to higher compensation expenses, including front office hiring and wage inflation, as well as investments in technology, marketing, and increased legal expenses.

JP Morgan Chase – technical view

 

Source; IG

The share price of JP Morgan remains in a long-term uptrend, highlighted by the price trading firmly above the 200-day simple moving average (200MA) (blue line).

In the short term, a recent break above dotted trend line resistance level sees 156.90 as the initial upside resistance target from the move. The share price has however moved into overbought territory in the near term.
Traders looking for new long positions into the company might hope to find entry into a pullback from overbought territory towards the 142.60 level.