JPMorgan Chase (JPM.US) stock price soared to a record high this week, but Baird analysts sounded the alarm: expectations have been overextended!

Driven by multiple positive factors, the rising trend of the leading US bank JPMorgan Chase (JPM.US) has attracted market attention, with its stock price soaring over 40% from its April low and hitting a historical high this week. However, Baird analysts believe that this surge has already priced in expectations. The bank has downgraded the rating of the largest bank in the United States from "neutral" to "underperform the market". Baird analysts admit that there are indeed bullish reasons for large US banks at the moment, and JPMorgan Chase is considered a "golden standard" in the industry. However, they emphasize that market expectations have been excessively inflated, and the stock valuation is already severely overbought. Analyst David George wrote in a research report, "We are aware that it may not be the right time to be bearish at the moment, and we understand that JPMorgan Chase is the industry benchmark - leading market share, solid balance sheet, but market expectations have been pushed to excessively high levels." Quarterly earnings exceeding expectations, passing stress tests, and relaxation of regulatory policies (including easing banking capital rules) have created a optimistic outlook for large banks in the market. This optimistic sentiment has driven the stock price of JPMorgan Chase to rise for six consecutive days, closing at $288.75 on Thursday, more than 20% higher than Baird's 12-month target price of $235. "Instead of chasing recent gains, it is better to position yourself when regional banks experience a pullback," they pointed out in their report on Friday, highlighting significant price differences between large banks and "reasonably undervalued" regional peers. Data shows that since the market sell-off triggered by Trump's tariff policies in early April, the KBW Bank Index has rebounded by more than 30%, while regional banks have only increased by 18% during the same period, still far below the year's high. The analysts also downgraded the rating of Bank of America Corp (BAC.US) from "outperform the market" to "neutral", stating that its stock price has reached fair value. As a result, at the time of writing, the stock prices of JPMorgan Chase and Bank of America Corp have weakened slightly, while US stock futures and other bank stocks are bucking the trend by rising. The Federal Reserve is scheduled to release the annual bank stress test results on Friday afternoon at 4:30 pm Eastern time, with JPMorgan Chase expected to release its quarterly earnings on July 15 and Bank of America Corp following suit the next day.