Baird downgrades JPMorgan Chase to sell, sees stock dropping nearly 20%

Investors should dump JPMorgan Chase shares, according to Baird. Analyst David George downgraded the stock to underperform from neutral. His $200 price target implies around 19% downside from Wednesday’s close. George thinks that the stock has a “poor” risk-reward profile. He believes that JPMorgan is over-earning on both net interest income and credit and finds the stock expensive at current trading levels. “We find that expectations are quite high, with the stock trading at ~2.6x [tangible book value], 15% cap to assets, over 14x 2026 [earnings per share] estimates, and ~10x [pre-provision net revenue] – all close or at all-time highs,” he wrote in a Wednesday note to clients. “We know we are fighting the tape here, but believe it makes sense to sell the stock.” JPM YTD mountain JPM, year-to-date George also noted that, even with a potentially more friendly regulatory environment under a second Trump administration, JPMorgan Chase may not grow its buyback program from here. “While a more bank-friendly regulatory environment should lead to a greater opportunity for outsized capital return in the near-term, we don’t expect JPM to aggressively buy back its stock here,” he continued. “At these prices, buybacks simply don’t have the impact anyway to EPS and isn’t a great use of capital at these levels in our view.” George’s call sets him apart from other analysts on the Street. LSEG data shows 15 of the 24 analysts covering the stock have a buy or strong buy rating.