Nomura Securities Maintains a 'Buy' on JPMorgan (JPM); Cutting Price Target and Estimates

May 11, 2012 10:01 AM EDT
Get Alerts JPM Hot Sheet
Price: $83.50 -0.52%

Rating Summary:
    17 Buy, 19 Hold, 4 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 22 | Down: 34 | New: 34
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Nomura Securities maintains a 'Buy' on JPMorgan (NYSE: JPM) price target lowered from $55 to $50.

Analyst, Glenn Schorr, said, "JPM announced significant mark-to-market losses in its synthetic credit portfolio, stemming from a more volatile and less effective hedge than previously believed. As a result, Corporate segment income as of today would be ($800M) after-tax, a ($1bn) delta from prior guidance. But, we think the overall financial impact (including $1bn+ in further unwind costs) is not the main issue given the company’s already high capital (adjusted 8.2% B3T1C) and JPM’s quarter run rate earnings >$4bn. What really hurts is the negative impact on JPM’s reputational premium that is likely to hit the stock. While the original premise was to hedge the company in a stress credit environment, we haven’t seen credit or volatility blow out this quarter so it’s obviously more complicated than that (like relative trading between tranches and tenures). Trimming F12E EPS estimate $4.75 to $4.32."

For an analyst ratings summary and ratings history on JPMorgan click here. For more ratings news on JPMorgan click here.

Shares of JPMorgan closed at $40.74 yesterday.

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