JPMorgan (JPM), one of the largest U.S. banks, has announced its plans to acquire fintech company OpenInvest by the third quarter of 2021. The financials of the deal have not been disclosed so far.
Founded in 2015, OpenInvest is funded by YCombinator and Andreessen Horowitz. The company is focused on offering environmental, social, and governance (ESG) investment management products and impact reporting services. As per the terms of the deal, OpenInvest will be retaining its own brand name.
“This acquisition further advances our strategic focus on sustainable investing, and we are thrilled to welcome OpenInvest to JPMorgan,” said Ben Hesse, Head of Strategy and Business Development for JPMorgan Asset & Wealth Management.
Notably, this marks the third buyout by JPMorgan in the fintech space. Earlier this month, the company agreed to buy U.K.-based online investment management platform, Nutmeg. The company also recently bought 55ip, a fintech company focused on delivering tax-smart investment strategies through model portfolios. (See JPMorgan stock chart on TipRanks)
On June 15, BMO Capital analyst James Fotheringham assigned a Hold rating to the stock and lowered the price target to $139 from $140 (9.9% downside potential).
The analyst said, “For long-term investors insensitive to elevated valuations, we highlight JPM as an industry winner given its digital investments, earnings diversification, strong balance sheet, and deep bench of management talent.”
Overall, the stock has a Moderate Buy consensus rating based on 11 Buys, 4 Holds, and 1 Sell. The average JPMorgan price target of $172.92 implies 12.1% upside potential from current levels.
JPM scores a 7 out of 10 on TipRanks’ Smart Score rating system, which indicates that the stock is likely to perform in line with market averages.
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