JPMorgan's Conference Presentation Reinforces BUY Thesis Amid Regulatory and Credit Vigilance

What happened

JPMorgan Chase presented at the Goldman Sachs 2025 U.S. Financial Services Conference, likely reiterating its financial and strategic outlook as detailed in recent filings. The company emphasized its durable earnings power, with 2024 net income of $58.5B and strong ROE/ROTCE of 18%/22%, supported by a diversified franchise across consumer, investment banking, and asset management segments. Management probably highlighted the fortress balance sheet, including a CET1 ratio of 15.7% and substantial liquidity of approximately $1.4T, which underpins capital returns like the new $30B share buyback program. Key risks, such as pending U.S. Basel III regulations and credit normalization in cards, were addressed, with the company positioning for potential regulatory moderation to enhance capital flexibility. Overall, the presentation aligns with the existing BUY thesis, reinforcing JPMorgan's strengths while acknowledging ongoing challenges that require careful monitoring.

Implication

JPMorgan's conference presentation underscores its operational resilience and capital strength, supporting continued capital returns through buybacks and dividends. However, the binding Standardized risk-based ratios mean that final U.S. Basel III and Enhanced SLR rules could significantly impact leverage constraints and distribution capacity, making regulatory updates a critical near-term catalyst. Credit normalization in cards, with potential upticks in delinquencies, poses a downside risk to provisions and earnings, necessitating vigilance on quarterly credit metrics. The company's growth levers, such as investment banking fee rebounds and payments initiatives like JPM Coin, add fee optionality but depend on execution amid competitive pressures. Overall, while the fortress balance sheet provides downside protection, investors should balance optimism with a disciplined focus on regulatory and credit developments that could shift the thesis to HOLD if conditions deteriorate.

Thesis delta

No material shift in the investment thesis; the presentation likely served to reaffirm JPMorgan's existing strengths and risks outlined in the DeepValue report. Continued emphasis on capital optimization and regulatory watch items remains central, with any future changes dependent on final rule outcomes and credit performance.