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JPMorgan (NYSE:JPM): Joining the Healthcare Game, Right on Time

Story Highlights

JPMorgan appears to have chosen the perfect time to start a venture capital unit to fund healthcare innovations, as company valuations are running low this year compared to 2021.

JPMorgan Chase (NYSE:JPM) is tapping into the healthcare space with the launch of its healthcare venture-capital body, which will be run under its growth-equity and private-credit investment group, J.P. Morgan Private Capital.

The U.S.’s largest bank entered the market during a slow period for venture funding and IPOs in the life-sciences sector. Although innovation in life sciences is continuing at its solid momentum, capital flow into the domain has slowed down considerably this year, compared with last year’s pace. This means that the valuations of the companies in this market are relatively low, making it the perfect time for JPMorgan to invest.

Market tracker PitchBook Data found that until September this year, U.S. biotech startups raised $23.8 billion in venture capital. Although this is higher than venture capital funds raised during the entire year of 2019, it marks a sharp decline from 2021, when startups raised $38 billion.

Despite losing 18% this year thus far, shares of the company have been doing relatively well over the past three months, gaining 15% in that duration.

Is JPM a Buy today?

Wall Street is cautiously optimistic about JPM stock, with a Moderate Buy consensus rating based on seven Buys, three Holds, and one Sell. The average price target for JPMorgan stock is $138.55, which indicates an 8.12% upside over the next 12 months.

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