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HomeInvestmentJPMorgan Chase (NYSE:JPM) Announces New Pilot Program to Benefit Renters, Landlords

JPMorgan Chase (NYSE:JPM) Announces New Pilot Program to Benefit Renters, Landlords

One of the biggest names in financial services around, JPMorgan Chase (NYSE: JPM), brought out plans for a new pilot program that would offer up a payments platform for renters and landlords. The new payments platform would, ultimately, automate the process of paying, and receiving, rent.

While this move will likely improve things for JPMorgan, the question is, by how much? I don’t expect this move to make a lot of impact on JPMorgan’s overall operations, and keep in mind that there will be significant challenges and potential ahead for this company.

Thus, overall, I’m neutral on JPMorgan. I love diversification, but there’s a potential here that JPMorgan is branching off in too many directions at once.

Is JPMorgan a Good Stock to Buy, According to Analysts?

Turning to Wall Street, JPMorgan Chase has a Moderate Buy consensus rating. That’s based on seven Buys, three Holds, and one Sell assigned in the past three months. The average JPMorgan price target of $137.91 implies 9.1% upside potential.

Analyst price targets range from a low of $114 per share to a high of $158 per share.

Right now, at around $126 per share, JPMorgan Chase is trading very slightly closer to its average targets than to its lowest targets. That’s a decent potential buy-in point, but there’s still some potential room to fall yet.

Three years of declining annual revenue isn’t a good sign, however. JPMorgan’s annual revenue went from $142.515 billion in 2019 to $129.91 billion in 2020. It then fell to $127.2 billion in 2021.

Nonetheless, for the 12 months ending in September 2022, revenue sits at $138.06 billion. That suggests a clear comeback in process, though only the last three months of this year will tell for certain.

Perhaps the most compelling evidence for JPM’s bull case, though, is that JPMorgan has a ‘Perfect 10’ Smart Score on TipRanks. That’s the top of the scale and suggests a strong probability that the stock will ultimately outperform the broader market.

Right Idea, Wrong Time

Certainly, JPMorgan’s move to bring out an easier way for tenants to pay landlords will be a welcome move. Smoothing out cash flow for landlords will undoubtedly be welcome. Tenants will, albeit to a lesser extent, appreciate the convenience of automatic payments as well.

Timing, however, may prove a problem. A recent report from revealed that only four cities in the United States—Detroit, Memphis, Oklahoma City, and Tulsa—offered, on average, sufficient earnings to pay 100% or more of what was needed to afford an entry-level home.

Thus, JPMorgan’s move to take money directly from a user’s bank account to pay off the landlord at a time when buying a home is virtually impossible will only have a limited impact.

However, this isn’t JPMorgan’s only play. The company recently launched Capital Connect, a platform designed to get more investment into startup businesses. The platform looks to provide more venture capital funding to newly-minted businesses.

Additionally, JPMorgan is pushing harder into digital payment systems. It’s teamed up with Visa (NYSE: V) to make cross-border payments via blockchain easier to carry out. The combined efforts of JPMorgan’s Liink system and Visa’s B2B Connect should make international payments a smoother proposition.

With failed payments costing the world’s economy around $118 billion annually, and two in three issues connected directly to incorrect payment information, simplifying the process via blockchain should win JPMorgan quite a bit of new interest.

JPMorgan has even bolstered its crypto presence. The company recently hired Aaron Iovine to serve as its executive director of digital assets regulatory policy. That makes it clear that JPMorgan Chase will have more to do with crypto in the near future.

Conclusion: About as Much Chance for Success as Failure

In a nutshell, JPMorgan Chase has about equal chances to succeed in its new ventures as it does to fail. It’s launched several ventures. That increases the chances that at least one will work. However, there’s also a risk of diffuse focus here at a time when paying close attention could mean a bigger win.

The company has clearly diversified its efforts, but with a souring macroeconomic environment for a backdrop, any of these efforts could ultimately falter at any time. That’s why I’m neutral on JPMorgan Chase.


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