Comparative Valuation of JPMorgan Chase & Co and Berkshire Hathaway: Stock Analysis and Market Comparison

COMPARATIVE VALUATION 1
COMPARATIVE VALUATION OF BERKSHIRE AND JP MORGAN
Current stock valuation of JPMorgan Chase & Co is at USD 105.08 while for Berkshire Hathaway is USD 301,000.00.
The P/E for JPMorgan Chase & Co is at 23 while for Berkshire Hathaway is 15.54.JP Morgan has a higher P/E. This shows that the market values JP Morgan
higher than Berkshire.
Both companies have a higher PE than the industry average. This shows that they are outperforming the industry averages.
From a valuation perspective, JP Morgan has a P/E but a lower stock valuation than Berkshire.
JP Morgan is strongly favoured by the market and delivers strong results consistently over the years. Its dividend yield is also consistent with the industry and
sector averages for JP Morgan. Data for dividends for Berkshire was missing. Its PE variation between the highest and lowest over the five years is also low
and does not swing wildly at 16 to 14 respectively.
Gallant (2018) , JP Morgan however appears to be overvalued compared to the industry. It is valued at P/E of 23 compared to industry of 18. Berkshire is
undervalued at P/E of 15 compared to industry of 18, Berkshire is undervalued at 15.
Both companies are reporting below average end of year closing earnings compared to the average earnings for the same year.
JP Morgan PE is higher than the average high PE for the last five years.
Berkshire PE is lower than the average high PE for the last five years.
The outlook for both companies is positive as they continue to offer impressive returns with JP Morgan expanding through a partnership in Mexico.
The fundamentals of both companies remain positive for them to deliver positive results soon.
This is seen in the growth in sales figures where for Berkshire was 8% and 18% for JP Morgan.
In conclusion Berkshire Hathaway is undervalued compared to the industry. Its competitor, JP Morgan is also overvalued compared to industry. In terms of
profitability JP Morgan, has a higher profit than Berkshire.
Comparative analysis

COMPARATIVE VALUATION 2
Firm Stock Symbol Current
Share Price
Firm P/E
Ratio (TTM)
Firm P/E High Last
5 yrs.
Firm P/E Low Last 5
yrs.
Industry P/E Ratio
(TTM)
Sector P/E Ratio
(TTM)
Selected Firm JPMorgan
Chase & Co JPM.N 105.08 23.00 15.63 13.76
18.
60 18.87
Major
Competitor
Berkshire
Hathaway
Inc
BRKa.N 301 000.00 15.54 29.24 13.5 18.
60 18.87
Firm Stock Symbol
Earnings past
12 months
(TTM)*
Mean Year
End
Earnings
Estimate
Estimated share
price based on TTM
P/E and Earnings
past 12 months
Estimated share
price based on
Industry's TTM
P/E and Firm's
earnings TTM
Estimated share price
based on Sector's TTM
P/E and Firm's earnings
TTM
Selected Firm JPMorgan
Chase & Co JPM.N 2.08 2.58 4
.57 0.81 0.82
Major
Competitor
Berkshire
Hathaway
Inc
BRKa.N 2 645.27 3 627.30 19 369.37 1.20 1.21
Firm Stock Symbol Earnings past
12 months*
Mean Year
End
Earnings
Estimate
Estimated share
price based on TTM
P/E and Earnings
past 12 months
Estimated share
price based on
Firm's TTM P/E and
Mean Year End
Earnings Estimates
Estimated share
price based on
Industry's TTM
P/E and Mean
Year End Earnings
Estimates
Estimated share price
based on Sector's TTM
P/E and Mean Year
End Earnings Estimates
Selected Firm JPMorgan
Chase & Co JPM.N 2.08 2.58 4.57 8.91 7.21 7.31
Major
Competitor
Berkshire
Hathaway
Inc
BRKa.N 2 645.27 3 627.30 19 369.37 0.00 0.01 0.01
* I have used the available data of Quarter ending March -19
Data has been sourced from www.reuters.com as accessed at 29th January 2019.