JPMorgan Chase & Co.JPMNYSE

Overview Intelligence Charts News Fundamentals Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

DCF Valuation Summary

Sell

Fair Value: $241.78 per share(market-calibrated)

-18.7%

Upside to Fair Value

Current

$297.56

Pure Model

$235.66

Fair Value

$241.78

Bull Case

$238.98

Bear Case

$224.24

Market Reality Check

Model Terminal Growth

2.50%

Market-Implied Growth

4.48%

Calibrated Growth

2.99%

Fair value uses 75% model / 25% market-implied terminal growth. Pure model: $235.66.

What's Driving This Ratingfor JPM

✓

CapEx already efficient

CapEx at 0.00% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

✓

Premium margins already priced in

EBIT margin of 31.30% is already well above sector average. The model holds this level — there's limited room for margin expansion to drive upside. Valuation depends primarily on revenue growth.

→

Moderate revenue growth

Analyst consensus projects -30.49% revenue growth, fading to 2.50% by Year 10. Revenue reaches $258.2B (vs $280.3B today).

🎯

Market pricing in higher long-term growth

To justify $297.56, the market implies 4.48% perpetual growth — 198bps above the model's 2.50%. This suggests the market sees additional growth catalysts (AI, new products, market expansion) not captured in analyst estimates.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 79.63% indicates efficient cash generation. FCF reaches $70.1B by Year 10 (27.16% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)1.05

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)9.24%

Cost of Debt

Pre-tax Cost of Debt12.49%

Tax Rate21.42%

After-tax Cost of Debt9.81%

Equity Weight (E/V)62.40%

Debt Weight (D/V)37.60%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (62.40% × 9.24%) + (37.60% × 9.81%)

= 9.46%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$194.9B	$214.3B	$228.2B	$239.7B	$258.2B
EBIT	$61.0B	$67.1B	$71.4B	$75.1B	$80.8B
Tax	$13.1B	$14.4B	$15.3B	$16.1B	$17.3B
NOPAT	$47.9B	$52.7B	$56.1B	$59.0B	$63.5B
+ Depreciation	$5.5B	$6.0B	$6.4B	$6.7B	$7.2B
- Capex	--	--	--	--	--
- Δ NWC	-$8.5B	$1.1B	$557M	$585M	$630M
Free Cash Flow	$61.9B	$57.7B	$62.0B	$65.1B	$70.1B
Discount Factor	0.914	0.763	0.637	0.531	0.405
Present Value	$56.6B	$44.0B	$39.4B	$34.6B	$28.4B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$70.1B

Terminal Growth Rate2.50%

WACC9.46%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$1.0T

PV of Terminal Value$418.7B

Exit Multiple Method

Year 10 EBITDA$88.1B

Exit Multiple (EV/EBITDA)12.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$1.1T

PV of Terminal Value$428.1B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$390.4B

PV of Terminal Value$418.7B

Enterprise Value$809.1B

(-) Net Debt$156.6B

Equity Value$652.4B

Shares Outstanding2.8B

Price per Share$233.96

Exit Multiple Method

PV of Projected FCFs$390.4B

PV of Terminal Value$428.1B

Enterprise Value$818.5B

(-) Net Debt$156.6B

Equity Value$661.9B

Shares Outstanding2.8B

Price per Share$237.35

Pure Model Fair Value

$235.66

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	1.50%	2.00%	2.50%	3.00%	3.50%
7.46%	$294.07	$304.20	$316.38	$331.29	$349.96
8.46%	$255.98	$262.72	$270.60	$279.92	$291.12
9.46%	$225.58	$230.28	$235.66	$241.87	$249.12
10.46%	$200.54	$203.93	$207.75	$212.08	$217.03
11.46%	$179.42	$181.94	$184.74	$187.86	$191.38

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$224.24

-24.6% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: 1.32

Base Case

$235.66

-20.8% vs current

• Analyst consensus
• Terminal growth: 2.5%
• Beta: 1.05

Bull Case

$238.98

-19.7% vs current

• +25% vs analyst consensus
• Terminal growth: 3.0%
• Beta: 0.90

Key Assumptions & Drivers• Financial Services Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth-30.49%

Year 3 Revenue Growth5.26%

Year 5 Revenue Growth2.50%

Year 7 Revenue Growth2.50%

Year 10 Revenue Growth2.50%

Terminal Growth Rate2.50%

Margin & Efficiency

Current EBIT Margin31.30%

Tax Rate21.42%

Historical Capex / Rev0.00%

NWC / Revenue10.00%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 12x EV/EBITDA (Financial Services sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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