I’d back JPM for the next six months. A 20% ROTCE alongside strong equity-markets and investment-banking growth gives it a more diversified earnings base than the other two, although rising credit costs are the key risk.
NFLX would be my second choice. The 34.6% Q3 operating margin is impressive, but I’d want to see revenue growth hold up as margins normalise.
TSLA has the greatest upside potential, but also the widest range of outcomes. The rebound to US$1.53B in free cash flow is encouraging, yet falling net income and higher operating expenses suggest the earnings story still needs work.
I would buy a disappointing reaction if fundamentals remained intact. My key metrics: JPM credit costs, NFLX revenue growth and TSLA free cash flow plus operating margin. A falling share price alone is not a thesis. A negative earnings revision is.
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