Jamie Dimon states that JPMorgan stock is overvalued: "We won't be purchasing a significant amount of shares."

• Dimon was direct when questioned about the timing of a possible increase to the bank's share buyback program.
• Dimon stated that we won't be purchasing a significant amount of stock at these prices.
• Over the past year, JPMorgan, the largest U.S. bank by assets, has experienced a 40% increase in its share price, reaching a 52-week high of $205.88 on Monday. However, Dimon's comments negatively impacted the stock's performance.

Jamie Dimon thinks shares of are expensive.

During JPMorgan's annual investor meeting on Monday, the bank's longtime CEO stated that the timing of a potential increase in the bank's share repurchase program was uncertain. When questioned about this, Dimon was direct and said so.

Dimon stated clearly, "We won't be purchasing a significant amount of stock at these prices."

Despite the 2023 regional banking crisis, JPMorgan, the largest U.S. bank by assets, has outperformed other banks, including smaller firms, with its shares increasing by 40% over the past year, reaching a 52-week high of $205.88 on Monday. However, Dimon's comments caused the stock to dip.

JPMorgan shares are currently trading at a premium price compared to their tangible book value, as measured by the commonly used industry metric.

'A mistake'

"Dimon stated that buying back stock of a financial company more than twice its tangible book value is a mistake, and they won't do it."

On Monday, the bank's shares dropped by 4.5% due to Dimon's remarks about his company's stock and his potential retirement.

JPMorgan has resumed stock buybacks after pausing to build up capital under new guidelines.

Charles Peabody, an analyst at Portales Partners, wrote in a March research note that JPMorgan is likely to purchase shares at a $2 billion to $2.5 billion quarterly clip, indicating that Dimon's guidance means the program is unlikely to be boosted anytime soon.

JPMorgan CEO has frequently resisted pressure from investors and analysts who deemed their views short-sighted. Despite low interest rates, Dimon maintained high levels of cash instead of investing in low-yielding, long-term bonds. This strategy helped JPMorgan outperform other lenders, including Bank of America, when interest rates rose.

Underappreciated risks

Dimon's reluctance to part with cash is not solely due to impending capital regulations. On several occasions Monday, he expressed a "cautiously pessimistic" outlook on economic risks, including those related to inflation, interest rates, geopolitics, and the potential reversal of the Federal Reserve's bond-buying programs.

High-quality corporate bonds' prices do not accurately reflect the potential for financial stress, according to Dimon.

"Dimon stated that the investment grade credit spread, currently at its lowest point, will eventually be incorrect. "It's only a matter of time," he said."

Since 2022, Dimon has warned of an economic "hurricane" caused by geopolitical risks and quantitative tightening. Despite the continued strength of the economy, Dimon's concerns have influenced his decision-making process.

""If the stock rises, we'll reduce our purchases, but if it falls, we'll increase them," he stated on Monday."