Should you buy JPMorgan stock after its Q4 earnings?

JPMorgan Chase & Co (NYSE: JPM) reported market-beating results for its fourth financial quarter on Friday. Shares are still down on muted guidance.

JPMorgan stock upgraded to ‘buy’

The largest U.S. bank forecasts $73 billion in net interest income this year – about $1.4 billion below the consensus. It also expects a 7.0% year-over-year increase in expenses to $81 billion related to wage inflation and investments in technology.

Still, CFRA Research’s Ken Leon recommended buying JPMorgan stock this morning and said its shares had upside to $156 – about a 10% gain from here.

JPMorgan is preparing for a recession

According to JPMorgan, the U.S. economy is headed for a mild recession in 2023.

To that end, it added $1.4 billion to reserves this quarter versus $1.8 billion of release a year ago. Nonetheless, Leon said on CNBC’s “Squawk on the Street”:

Versus its high in October 2021, JPMorgan stock is down more than 15% at writing.

JPMorgan Q4 financial highlights

• Earned $11 billion versus the year-ago $10.4 billion
• Per-share earnings went up from $3.33 to $3.57
• Revenue jumped 18% year-on-year to $34.50 billion
• Consensus was $3.07 a share on $34.3 billion revenue
• Net interest income climbed 48% - also ahead of estimates

Consumer and Community Banking was also strong, both year-over-year and versus the analysts’ forecast. Revenue from Corporate and Investment Banking, however, slipped 9.0% this quarter to $10.5 billion, as per the earnings press release.

Investment banking, in particular, was hit hard, down 57% versus a year ago as higher rates resulted in a sharp decline in deal-making. JPMorgan stock pays a dividend yield of 2.81%.