Jim Cramer’s Top 11 Trump Trades: Winners and Losers

4. JPMorgan Chase & Co (NYSE:JPM)

Number of Hedge Fund Investors: 112

Jim Cramer thinks JPMorgan Chase & Co (NYSE:JPM) can gain if Donald Trump becomes the President in the upcoming election.

“President Trump was not a big believer in financial regulation or at least arduous financial regulation” which is great for banks including JPMorgan Chase & Co (NYSE:JPM), Cramer said.

Trump recently said in an interview that he’d be open to consider JPMorgan CEO Jamie Dimon for the position of Treasury secretary.

“I have a lot of respect for Jamie Dimon,” said Trump.

Jim Cramer is bullish on JPMorgan Chase & Co (NYSE:JPM) and said in a recent program that he believes the stock could touch the $1 trillion market cap. Cramer said that JPMorgan Chase & Co (NYSE:JPM) is one of the “best banks in the world” and sells only 12 times earnings. The CNBC host said this multiple is “way” too low and “way lower” than the average stock for the S&P 500.

“If the Fed starts cutting I think this one can undergo some huge multiple expansion.”

While JPMorgan Chase & Co (NYSE:JPM) managed to beat estimates on the latest earnings report, its earnings were helped by one-time benefit from its Visa stake exchange. The bank also increased its provision for credit losses that shows expected problems from bad loans ahead. However, amid signs of easing inflation and JPMorgan Chase & Co’s (NYSE:JPM) dominance in the banking industry, the risks that the bank faces are capped.

In its latest report JPMorgan Chase & Co (NYSE:JPM) kept its net interest income guidance it gave in May. Following a steep decline in 2020 and 2021 during the COVID-19 pandemic, its net interest income has nearly doubled from a low of $52.3 billion in FY 2021 to $91.6 billion currently (on a TTM basis). Upbeat NII is driven by a favorable interest rate environment and stable loan balances.

While JPMorgan Chase & Co (NYSE:JPM) looks undervalued based on its P/E ratio when compared to the broader market, it’s not a fast growth stock. Wall Street expects JPMorgan Chase & Co (NYSE:JPM) earnings to grow just over 1% over the next five years annually.

Its dividend yield is 2.2% with over a decade of consistent dividend increases. In this backdrop, JPMorgan Chase & Co (NYSE:JPM) is a suitable income stock for investors looking for stability instead of strong growth.

Carillon Eagle Growth & Income Fund stated the following regarding JPMorgan Chase & Co. (NYSE:JPM) in its first quarter 2024 investor letter:

“JPMorgan Chase & Co. (NYSE:JPM) contributed positively to performance following solid financial results and positive guidance for the remainder of 2024. Moreover, growing chatter around rising capital markets activity likely contributed to the stock’s strong performance relative to other banks. Recall that JPMorgan has a robust capital markets franchise.”