Dimon sets out to win back JPMorgan shareholders after stock slide

Inside JPMorgan Chase, senior executives are counting on an investor day to redeem themselves from a routine January conference call now widely viewed as disastrous.

JPMorgan’s stock has been reeling since Chief Executive Jamie Dimon and finance head Jeremy Barnum briefed analysts on the bank’s year-end results and forecast an unexpected bump in expenses. As the pair went over the company’s plan to ramp up spending that morning mid-January, the already sliding stock began spiraling further — into its biggest one-day plunge since 2020. 

Jamie Dimon, chief executive officer of JPMorgan Chase & Co., during a Bloomberg Television interview in London, U.K., on Wednesday, May 4, 2022. Dimon said the Federal Reserve should have moved quicker to raise rates as inflation hits the world economy.

Chris Ratcliffe/Bloomberg

The firm’s investor day on Monday — its first since the pandemic began — is aimed at assuaging shareholders with more clarity on its higher expenses. With its stock down 25% this year, making it the worst performing among its biggest Wall Street peers — and after a stinging rejection by investors of Dimon’s compensation package this week — the stakes for the gathering will be high.

“I see this investor day as JPMorgan playing more defense as they try to defend how their financial discipline is as good as it was in the past,” said Mike Mayo, a veteran bank analyst at Wells Fargo. “They’re showing record expense growth and less excess capital.”

On the January call, the bank forecast an 8.6% hike in spending as it set its sights on building out offerings, revving up technology and competing for talent. Mayo, who’s made repeated calls for more information on how the bank’s recent acquisitions and spending will pay off, downgraded his recommendation on the stock in response.

Whether Dimon, 66, can reinstate his firm into his investors’ good graces — as he has so many times in his storied career — will hinge on how the bank demonstrates a handle on expenses amid growing concerns about U.S. economic growth. JPMorgan’s investment agenda “ought to be front and center” at investor day, Credit Suisse Group analyst Susan Katzke wrote in a note Wednesday.

Dimon, who in recent years has been delegating more work to deputies as he’s embraced his role as an industry leader, has been as hands-on as ever in the months since the January call, according to people familiar with the matter.

A representative for the bank declined to comment.

“It seems pretty clear that market wants to hear more from us and we’re eager to tell the story and take some time to go into more detail,” Chief Financial Officer Barnum said in February as he announced the firm’s plans to hold the event. Barnum is set to present, along with Dimon and other executives, including President Daniel Pinto and consumer-banking co-heads Marianne Lake and Jennifer Piepszak.

Investors have homed in on expenses following JPMorgan’s recent buying spree, with last year its most active for acquisitions and strategic investments since at least the financial crisis. The bank spent almost $5 billion on acquisitions in the past 18 months, adding about $700 million to its incremental investment expenses this year, Dimon wrote in his annual shareholder letter in April. Over time, the investments “should pay for themselves,” Dimon said during the company’s annual meeting Tuesday, promising that more details will follow at its investor day. 

In addition to costs, revenue expectations will also be top of the agenda, particularly as the Federal Reserve continues to hike rates. Dimon said Tuesday that, though JPMorgan already lifted its net-interest-income guidance to reflect six 25-basis-point hikes, the firm now expects more hikes and will provide new guidance at Monday’s event.

Whether investors will be placated depends on “a greater appreciation for management’s investment agenda,” said Credit Suisse’s Katzke, as well as “an ability to see through the risks in the operating environment.”

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