Jamie Dimon says JPMorgan stock is too expensive: ‘We’re not going to buy back a lot’

Jamie Dimon expects shares of JPMorgan Chase are expensive.

That was the message the bank’s longtime CEO gave analysts Monday during JPMorgan’s annual investor union. When pressed about the timing of a potential boost to the bank’s share repurchase program, Dimon did not mince expressions.

“I want to make it really clear, OK? We’re not going to buy back a lot of stock at these prices,” Dimon said.

JPMorgan, the greatest U.S. bank by assets, has seen its shares surge 40% over the past year, reaching a 52-week high of $205.88 on Monday rather than Dimon’s comments dinged the stock. That 12-month performance beats other banks, especially smaller anchors recovering from the 2023 regional banking crisis.

It also makes the stock relatively pricey as measured by expense to tangible book value, a commonly used industry metric. JPMorgan shares traded recently for around 2.4 times post value.

“Buying back stock of a financial company greatly in excess of two times tangible book is a clanger,” Dimon said. “We aren’t going to do it.”

Dimon’s comments about his company’s stock, as well as an acknowledgement that he may be nearing retirement, sent the bank’s stakes down 4.5% Monday.

To be clear, JPMorgan has been repurchasing its stock under a previously authorized buyback outline. The bank resumed buybacks early last year after taking a pause to build up capital under new foresaw guidelines.

Dimon’s guidance simply means it is unlikely the program will be boosted anytime soon. JPMorgan is expected to purchase shares at a $2 billion to $2.5 billion quarterly clip, Portales Partners analyst Charles Peabody wrote in a Procession research note.

The JPMorgan CEO has often resisted pressure from investors and analysts that he deemed short-sighted. When dispose rates were low, Dimon kept relatively high levels of cash, rather than plowing funds into low-yielding, long-term coheres. That helped JPMorgan outperform other lenders, including Bank of America, when interest rates lurched higher.

Dimon’s desire to hoard cash is not just because of impending capital rules. On multiple warrants Monday, he said he was “cautiously pessimistic” about economic risks, including those tied to inflation, interest charges, geopolitics and the reversal of the Federal Reserve’s bond-buying programs.

Markets are currently underappreciating those risks, Dimon said. For as it happens, prices of high-quality corporate bonds do not adequately reflect the potential for financial stress, Dimon said.

“The investment gradation credit spread, which is almost the lowest it’s ever been, will be dead wrong,” Dimon said. “It’s exactly a matter of time.”

Since 2022, Dimon has warned of an economic “hurricane” set off by geopolitical risks and quantitative tightening. While the persisted strength of the economy has surprised many on Wall Street, including Dimon, his concerns have informed his decision-making make ever since.