JPMorgan Chase (JPM) stock has experienced a price drop July 14-15, 2025 due to an analyst downgrade, and concerns about the bank’s future earnings.
HSBC downgraded the stock to “Reduce” from “Hold,” citing valuation concerns despite raising the price target. Additionally, JPMorgan’s president indicated that Wall Street’s expectations for net interest income (NII) and expenses in 2025 might be overly optimistic, given potential interest rate cuts and ongoing inflation.
Analyst Downgrade:
HSBC’s downgrade from “Hold” to “Reduce” resulted from the concerns about the stock’s valuation after a strong run-up, suggesting limited further upside potential without a significant change in the bank valuation.
HSBC is a competitor to JPMorgan Chase, particularly regarding global banking and financial services. Chase has a larger presence in the United States market, but HSBC is a global powerhouse with significant operations in other regions. Both banks offer a wide range of financial products and services, including retail banking, investment banking, and asset management. HSBC and Chase are direct competitors. JPMorgan Chase (JPM) is up 19.56% since the beginning of 2025, and is up 36.44% over the past year. HSBC (HSBC) is up 24.97%, and up 41.33% over the past year.
Optimistic Net Interest Income Expectations:
JPMorgan’s president, Daniel Pinto, cautioned that current NII forecasts may be too high, especially with anticipated fed interest rate cuts. NII, which represents the difference between what a bank earns on loans and what the bank pays out on deposits — a key factor in bank profitability. In banking, NII is also defined as the difference the bank earns on interest earned on assets, and interest paid on liabilities.
Interest Rate Sensitivity:
JPMorgan’s sensitivity to interest rate changes makes it vulnerable to potential negative impacts from Federal Reserve rate cuts.
Buy
Analysis indicates the the stock is undervalued and has the potential for price appreciation.Reduce or Underweight
Analysis indicates that the stock is not expected to perform as well as the overall market or a relevant benchmark, and therefore the analyst recommends decreasing the proportion of that stock in a portfolio. “Reduce” is a less negative recommendation than “sell”.Sell
Analysis anticipates a decline in the stock price and advises selling or liquidating the asset. This is a stronger recommendation, indicating that the analyst believes the stock is likely to decline in price and should be removed from the portfolio. It suggests that the stock is overvalued and may be a poor investment.
Is There a Buying Opportunity?
Despite the drop, some analysts suggest that the drop in stock price might be a reason for buying opportunity for investors with a long-term perspective, with JPMorgan’s industry size, strong capital position, and potential for revenue growth.
JPMorgan Chase (JPM) CEO Jamie Dimon said Tuesday, July 15, 2025 that the independence of the Federal Reserve is “absolutely critical” for Jerome Powell, the 16th Chair of the Federal Reserve. Trump administration efforts are underway to remove Jerome Powell is in this week’s news.
JPM opened at about 287 Tuesday morning, July 15, 2025.
