From Nasdaq:

JPMorgan Chase & Co (NYSE: JPM) and Bank of America Corp (NYSE: BAC) reported their Q4 2023 earnings. JPMorgan stock has done well in 2023, while Bank of America stock has lagged. Financial sector gained 5% with high-interest rates, but JPMorgan’s stock gained over 25%.

Bank of America’s stock, the most interest rate-sensitive among its peers, faced challenges due to substantial holdings of long-dated Treasuries and mortgage bonds. Rising rates led to increased interest payments on deposits, resulting in significant unrealized losses despite marginal improvements in net interest income (NII) and margins.

With the banking industry expected to benefit from rate cuts in 2024, investors want to know which stock offers more value. JPMorgan, with its global leadership position, appeared well-positioned to capture the 2024 bull market in bank stocks. However, Wall Street analysts saw less upside left in JPMorgan stock, relative to Bank of America stock, which appeared to trade at more favorable valuations.

While Bank of America stock appeared to trade at more favorable valuations, investors must not ignore the key risks including pressured net interest income and lack of deal activity. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



Read more: JPMorgan Chase Vs. Bank of America: Which Stock Offers More Value?