At today's price, JPMorgan's stock is pricing in only about 3.4% annual net-income growth for the next ten years. Over the past five years, the company's actual net income grew 14.4% a year — meaning the market is asking for far less than JPMorgan has already been delivering.
At its current price, JPM implies ~3.4% annual net-income growth for the next 10 years, discounted at 9%.
JPMorgan's actual 5-year (2020–2025) net-income growth averaged 14.4% a year.
Required growth vs. historical growth
Required growth from the reverse DCF below. Historical CAGRs: 10-K FY2022, p.44 (2020 net income $29,131M) and 10-K FY2025, p.44 (2025 net income $57,048M).
Sensitivity: what if the discount rate or income base moves?
| WACC | Required growth (FY2025 net income base) | Required growth (TTM net income base) |
|---|---|---|
| 8% | 1.18% | 0.36% |
| 9% (base case) | 3.35% | 2.51% |
| 10% | 5.35% | 4.47% |
| 12% | 8.96% | 8.04% |
At the base 9% discount rate, using the more recent trailing-twelve-month net income ($60.8B) instead of FY2025's audited figure ($57.0B) lowers the required growth rate from 3.35% to 2.51% — the better the recent results, the less future growth the market needs to assume. At a 12% discount rate, the required rate rises to nearly 9%, closer to the five-year revenue CAGR (8.8%).
What would move this number
- Switching from FY2025 net income ($57.0B) to trailing-twelve-month net income ($60.8B) lowers the required growth rate from 3.35% to 2.51% at a 9% discount rate.
- The 14.4% historical net-income CAGR isn't a clean baseline — it includes 2021 reserve releases (post-pandemic outlook improvement) and 2023's $2.8B First Republic bargain-purchase gain, both one-time boosts unlikely to repeat on a predictable schedule.
- A more conservative 12% discount rate pushes the required growth rate to nearly 9% — close to the five-year revenue CAGR, which would put the valuation closer to "priced for steady-state growth" territory.
Show your work
Inputs, sources, model assumptions, and the calculation
- Share price$360.84 — stockanalysis.com, Aug 18, 2026, 09:42 EDT
- Market cap$959.18B — stockanalysis.com, same timestamp
- FY2025 net income (audited)$57,048M — 10-K FY2025, p.44
- Trailing-twelve-month net income$60,800M — Q3 FY2025 ($14.4B) + Q4 FY2025 ($13.0B) + Q1 FY2026 ($16.5B) + Q2 FY2026 ($16.9B), from each quarter's earnings call
- 2020 net income$29,131M — 10-K FY2022, p.44 (Three-Year Summary)
- 2020 revenue$119,951M — 10-K FY2022, p.44
- 2025 revenue$182,447M — 10-K FY2025, p.44
- Discount rate (WACC)9% base case (8% / 10% / 12% tested) — standard large stable-company default
- Terminal growth rate2.5% — long-run GDP-level assumption
Model: net income (as the FCF-to-equity proxy) is assumed to grow at a constant annual rate g for 10 years, then at a 2.5% terminal rate thereafter — a two-stage dividend-discount-style model, solved by bisection for the value of g that equates present value to today's market capitalization. Net debt is not separately subtracted, given the bank-specific adjustment described above.
Normalization check: the three-year (2023–2025) average net income is $55.02B. FY2025 ($57.05B) is +3.7% above that average, and TTM ($60.8B) is +10.5% above it — both within the ±40% normalization threshold, so no adjustment was applied to either base case.
The fine print
- Change the discount rate, the income base, the projection window, or the terminal growth rate, and the answer moves — see the sensitivity table above.
- A reverse DCF shows what the market currently expects — it does not say what the stock is "worth."
- The bank-specific adjustment (net income in place of FCF, no net-debt subtraction) is an approximation, not the standard reverse-DCF formula.
- Whether 3.4% growth is realistic — or overly conservative — depends on the interest-rate cycle, credit costs, and competitive dynamics, not on this math alone.
- Any investment decision, and its outcome, is your own responsibility.
Frequently asked questions
What growth rate does JPM's stock price assume?
At today's price, JPMorgan's stock is pricing in only about 3.4% annual net-income growth for the next ten years — well below what it has historically delivered.
How does that compare to JPMorgan's actual growth?
Over the past five years, JPMorgan's actual net income grew 14.4% a year — far above the ~3.4% the current price requires, suggesting the market is pricing in a significant slowdown.
What share price was used for this analysis?
This analysis used $360.84, as of Aug 18, 2026.