* Bank's shares have lagged stock market, smaller firms
* Analyst questions value of being a big, global bank
* Investors want evidence spending will deliver growth
* Dimon to make his case at investor day on Tuesday
By David Henry
NEW YORK, Feb 27 (Reuters) - With the financial crisis in the rear-view mirror, investors and analysts are turning their attention to JPMorgan Chase & Co's languishing stock price, setting the stage for a tough investors meeting on Tuesday for Chief Executive Jamie Dimon and his team.
At least one widely followed Wall Street analyst has raised questions about whether it makes sense for the largest U.S. bank to be so big, pointing out that more narrowly focused financial institutions are fetching higher stock valuations for shareholders.
Dimon, who won wide acclaim for successfully managing JPMorgan through the worst of the financial crisis, will likely face difficult questions as he and his team give stock analysts and professional investors outlooks for the bank's six major operating units and the profit potential for the entire company.
Analysts are expected to press for plausible scenarios for profit growth because JPMorgan stock has lagged the broader stock market and trades at lower multiples of book value and earnings than shares of smaller competitors, such as Wells Fargo & Co, American Express Co, and money manager T. Rowe Price Group.
Although JPMorgan's shares have done better than other global banks, its stock traded on Monday at just pennies more than in 2004, when Dimon joined the company after it took over Bank One Corp where he was previously CEO. Over the same period, Standard & Poor's 500 stock index is up 22 percent.
"In short, if JPM is best-of-breed and it still under performs, perhaps the breed is not so good," bank analyst Mike Mayo of CLSA said in a research note last week.
Mayo, author of the book "Exile on Wall Street: One Analyst's Fight to Save Big Banks from Themselves," said that at the least "the company needs to better explain the synergies whose benefits are missing from the share price."
JPMorgan is made up of the top-ranked investment bank by revenue, the third-largest consumer bank by deposits, and the number one credit card issuer by receivables, Mayo observed. It also is second in processing transactions, as well as a major money manager.
BIGGEST U.S. BANK
With $2.27 trillion in assets, last year it became the biggest bank based in the United States, surpassing Bank of America Corp, which has been shrinking to recover from problems with home mortgage loans.
But investors in the stock market apparently do not see compelling benefits of such scale and diversity of businesses.
JPMorgan trades at 7.2 times estimated earnings for 2013, which is less than the valuations Wall Street puts on separate baskets of companies more tightly focused on its different business lines, according to Mayo.
For example, a group of eight representative commercial and retail banks trades at 9.5 times earnings, and a group of money managers trades at 12.3 times.
If JPMorgan's parts were valued at multiples like those of smaller companies, the stock would be 30 percent higher, concluded Mayo, who recommends the shares.
JPMorgan spokesman Joe Evangelisti declined to comment.
In the past, JPMorgan executives have argued that company's diversification has served its investors well. Its relatively steady consumer business, for example, has offset volatility in investment banking results. And, when losses on consumer loans were hitting the company hardest, its investment bank did relatively well.
JPMorgan's hardy balance sheet put the company in prime position to buy investment bank Bear Stearns and consumer bank Washington Mutual when they collapsed in 2008 and the government needed another firm to take them on to stabilize the financial system.
More recently, JPMorgan bank has been among those taking market share from weakened European banks which have retreated from making loans in the United States.
Now investors want to see if JPMorgan will build on the strength it showed during the crises to deepen its customer relationships and sign new accounts, analyst Jason Goldberg of Barclays Capital said in a preview of Tuesday's investor conference.
"As the global economies begin to normalize, it remains to be seen if some of its competitive advantages still hold," Goldberg said.
Dimon in the past has emphasized that the company has continued to invest in its businesses while the economy languished. For example, the bank has built new branches, growing five percent in 2011 for a total of 5,508. And, it has ramped up credit card television advertising, rewards programs and mailings to sign up wealthier customers.
Technology and communications costs in the retail branches went up 7 percent last year. Investors want to know if that kind of the spending will bring growth, or if it is just additional cost to do business, analyst John McDonald of Bernstein Research wrote ahead of Tuesday's conference.
JPMorgan's seventh annual investor day presentations will be held from 8:30 a.m. to 4:15 p.m. (1330-2115 GMT) at the bank's Park Avenue headquarters in New York.
The shares rose 2 percent on Monday to $39.06 and are up 17.5 percent this year.
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