It took a while after a bad bet cost it more than $50 billion in market cap, but JP Morgan Chase & Co. (NYSE:JPM) has finally climbed the hill Wednesday, passing Wells Fargo & Company (NYSE:WFC) as the nation's most valuable bank according to market capitalization, according to data compile by Bloomberg. Wells Fargo had been the most valuable bank since late October 2011.
At the end of trading Wednesday, JP Morgan Chase & Co. (NYSE:JPM) was valued at $184.9 billion after rising 1.6 percent on the week, allowing it to pass the $184.2 billion of Wells Fargo & Company (NYSE:WFC). It was just last year that JP Morgan made a losing bet on derivatives that cost the stock about $51 billion in value, so this is a pretty strong comeback. Taking the No. 1 spot was helped a bit by slowing growth at Well Fargo, where some investors seem to be a little skittish about slowing mortgage lending and tighter margins being reported.
RBC Capital Markets analyst Gerard Cassidy said, “Capital-market firms like JPMorgan have been burdened quite heavily by the financial debacle, more so than regional or national banks like Wells Fargo. As they continue to throw the baggage overboard, all of these legacy issues that have been hampering profit are going away. Owning the riskier names is more attractive today in this economy.”
Already this year, JP Morgan Chase & Co. (NYSE:JPM) stock has risen 11 percent, while Wells Fargo & Company (NYSE:WFC) has gone up a little more than 2 percent over this same time period. At this point, JP Morgan is trading a 95 percent of book value, while Wells Fargo is currently at 127 percent of book. “If you are less worried about risk you will start to bid up these shares, which are trading at below book,” said Portales Partners analyst Jennifer Thompson. “That’s where you will focus in terms of relative upside.”
What do you think about JP Morgan Chase & Co. (NYSE:JPM)? Are you a believer in the company and its stock? We'd like your thoughts in the comments section below.
DISCLOSURE: I own no positions in any stock mentioned.
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