On Thursday, Goldman Sachs maintained a positive outlook on JPMorgan Chase & Co. (NYSE:JPM), reiterating its Buy rating and a price target of $226.00. The investment bank's confidence in the financial giant is bolstered by JPMorgan's robust capital position and recent statements from management indicating that stock buybacks are likely to continue at the current pace.
This, according to Goldman Sachs, enhances the likelihood that JPMorgan will raise its regular dividends beyond market expectations after the Comprehensive Capital Analysis and Review (CCAR) results in June.
Goldman Sachs anticipates that JPMorgan will increase its dividend per share estimates for 2025 and 2026 by 9% and 17%, respectively, setting them at $5.80 and $6.70. These projections are significantly higher than the consensus, with the 2025 estimate surpassing the Visible Alpha consensus by 19% and the 2026 forecast by 26%.
This optimistic scenario is grounded in the expectation that JPMorgan's financial health will enable it to reward shareholders with higher dividends.
For investors aiming to capitalize on a potential dividend increase, Goldman Sachs' options strategist recommends a specific investment strategy.
The suggestion includes buying covered January 2026 collars, which involves purchasing JPMorgan stock, buying January 2026 at-the-money puts, and selling January 2026 at-the-money calls. This strategy could provide investors with a way to position themselves ahead of the anticipated dividend growth.
JPMorgan's commitment to returning capital to shareholders is a key factor in Goldman Sachs' positive rating. The bank's ability to sustain buybacks and potentially increase dividends underscores its financial strength and the proactive management of its capital reserves.
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