As of December 20, 2024, the Price-to-Earnings (PE) ratio for JPMorgan Chase (JPM) is 13.19.
Understanding the PE Ratio
The Price-to-Earnings (PE) ratio is a fundamental valuation metric used by investors to assess a company's current share price relative to its per-share earnings. It is calculated by dividing the current stock price by the company's earnings per share (EPS) over the past twelve months (Trailing Twelve Months or TTM). A higher PE ratio typically suggests that investors are willing to pay more for each dollar of earnings, often indicating higher growth expectations, while a lower PE ratio might suggest a company is undervalued or has lower growth prospects.
For a deeper dive into what a PE ratio signifies, you can refer to financial educational resources like Investopedia's PE Ratio Explanation.
JPMorgan Chase's Current PE Ratio Details
JPMorgan Chase's PE ratio of 13.19 as of December 20, 2024, is derived from its recent financial performance and market valuation. Specifically, this ratio is calculated based on a stock price of $237.6 per share and Trailing Twelve Months (TTM) Earnings Per Share (EPS) of $18.01.
This current PE ratio also reflects a notable increase, showing a 16% growth compared to its average PE ratio over the last four quarters, which was 11.4. This growth could suggest increasing investor confidence or evolving market perceptions regarding JPMorgan's future earnings potential.
Key Metrics for JPM's PE Ratio (as of Dec 20, 2024)
| Metric | Value |
|---|---|
| PE Ratio (Current) | 13.19 |
| Stock Price | $237.6 |
| TTM EPS | $18.01 |
| 4-Quarter Average PE | 11.4 |
| Growth from 4Q Average | 16% |
Significance of the PE Ratio for Investors
Investors utilize the PE ratio for several key purposes:
- Valuation Comparison: It helps compare the valuation of a company to its competitors or industry averages. A PE ratio significantly higher or lower than its peers might warrant further investigation.
- Growth Expectations: A higher PE ratio often implies that the market expects higher earnings growth in the future. Conversely, a lower PE might suggest lower growth expectations.
- Market Sentiment: Changes in a company's PE ratio over time can indicate shifts in investor sentiment or market conditions affecting the stock.
- Historical Analysis: Comparing the current PE ratio to a company's historical PE range can provide insights into whether the stock is currently trading at a premium or discount relative to its past valuations.
Understanding the PE ratio in conjunction with other financial metrics provides a comprehensive view of a company's financial health and market position.
