JPMorgan ready to win shareholders after Dimon stock slide

(Bloomberg) – Within JPMorgan Chase & Co., senior executives are counting on an investor’s day to free themselves from a regular January conference call that is now widely seen as catastrophic.

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JPMorgan’s stock has been rallying since Chief Executive Officer Jamie Dimon and Finance Head Jeremy Bernham briefed analysts on the bank’s end-of-year results and predicted an unexpected push for spending. When the pair surpassed the company’s plan to raise costs in mid-January, the already sliding stock began to spiral further – its biggest one-day sinking since 2020.

Monday is the firm’s Investors’ Day – the first since the epidemic began – aimed at reassuring shareholders with greater clarity about its high costs. With the stock down 25% this year, making it one of the worst performances among its biggest Wall Street peers – and after investors rejected Dimon’s compensation package this week – bets on the gathering will be higher.

Mike Mayo, an experienced bank analyst at Wells Fargo & Co., said: “I see this investor’s day as more of a defense for JPMorgan as they try to protect how their financial discipline is as good as in the past. Record spending increases and less extra capital. “

In a January call, the bank forecast an 8.6% cost increase as it aims to create offers, revitalize technology and compete for talent. Mayo, who has repeatedly called for more information on the bank’s recent acquisitions and how to repay expenses, downgraded his recommendation on the stock in response.

Whether Dimon, 66, will be able to reinstate his firm at the behest of his investors – as he has done many times in his multifaceted career – will depend on how the bank shows a handle on spending amid growing concerns about U.S. economic growth.

Credit Suisse Group AG analyst Susan Katz wrote in a note on Wednesday that JPMorgan’s investment agenda “should be front and center” on Investors’ Day.

Damon, who has been handing over more jobs to deputies in recent years as he assumes his role as an industry leader, has been hand-on as usual in the months since the January call, according to people familiar with the matter.

A bank representative declined to comment.

“It seems quite clear that the market wants to hear more from us and we are keen to tell the story and take some time to go into more detail,” Chief Financial Officer Barnum said in February when he announced the firm’s plans to hold the event. . President Daniel Pinto and Consumer-Banking co-chairs Marianne Lake and Jennifer Pipszak are ready to present the program with Dimon and other executives.

Investors have been taking on the cost since JPMorgan’s recent purchase, last year it was at least the most active for acquisitions and strategic investments since the financial crisis. The bank has spent about $ 5 billion on acquisitions in the past 18 months, adding about $ 700 million to its growing investment costs this year, Dimon wrote in his annual shareholder letter in April. Over time, investments should “pay for themselves,” Dimon said during the company’s annual meeting on Tuesday, promising that more details would follow on his investor day.

In addition to spending, revenue expectations will remain at the top of the agenda, especially as the Federal Reserve continues to raise rates. Damon said Tuesday that although JPMorgan has already raised its net-interest-earnings guidelines to reflect six 25-basis point hikes, the firm now expects further growth and will issue new guidelines at Monday’s event.

Credit Suisse told Katz that “the ability to see through the risks in the operating environment depends on whether investors will be satisfied” on a greater understanding of the management’s investment agenda.

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