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Don’t fear rising interest rates, these stocks could soar as rates rise

J.P. Morgan

We looked at regional bank BB&T (BBT) earlier, but the reality is that all financials do well with rising interest rates. Even banking giants like J.P. Morgan (JPM) enjoy the benefit of higher rates as they are able to generate greater interest income on the loans that they originate. We saw JPM shares move lower with the overall market over the last week, but the sell off was less pronounced, which was likely a result of traders understanding the benefit of higher rates on the company’s bottom line, as well as the benefits of a strong economy on the company’s overall business. JPM has a has a P/E of 17.7, and analysts forecast earnings growth of 26.15 for the current year, and earnings to rise by 9.2% per annum over the next five years. JPM is currently trading at $112.01, with an average price target of $115.46.

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Chart courtesy of www.stockcharts.com

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Michael Fowlkes

Michael Fowlkes is a financial writer who has been with the Fresh Brewed Media family since 2004. Over the course of his tenure with Fresh Brewed Media, he has worn many hats, including portfolio manager, options analyst, and writer. Michael received his undergraduate degree from Virginia Tech in Accounting and got his start in finance working as a stock trader for six years at Chase Investment Counsel in Charlottesville, Va.