Q4 Preview: JPMorgan (JPM) Could Kick Off Bank Earnings With a Bang

Shares of JPMorgan Chase & Co. (NYSE: JPM) are trading lower Thursday heading into fourth-quarter numbers. The stock lsat traded at $36.39, down 0.7 percent from Wednesday's close.

Ahead of the bell Friday, JPMorgan is expected to report earnings of 91 cents per share on revenue of $23.05 billion. The bank reported earnings of $1.14 per share reported in the same period last year.

Shares of JPMorgan gained 10 percent to $33.25 over the last quarter. The stock finished out 2011 about 20 percent lower, outpacing some of its larger U.S. rivals. JPMorgan shares have traded from $27.85 to $48.36 over the last 52-week time frame.

Investors will be keeping an eye on capital ratios. Last quarter, JPMorgan reported a Basel I ratio of 9.9 percent and Basel III ratio of 7.7 percent.

Data from Bloomberg shows 33 analysts have a Buy on JPMorgan, four have a Hold, and none suggest to Sell. The Street price target average is $45.50, with a low of $35 and high of $55.

Looking at some options, investors appear to be betting on some downside, with more volume and price movement in front month put contracts.

Analyst Comments

• Wells Fargo is calling JPMorgan one of its top picks. The firm noted, "JPM’s broad business mix (with leading shares in many of its franchises), solid balance sheet, and prudent management strategy remain attractive to us and should support superior returns in 2012: we estimate JPMorgan will generate ROTCE of 15.4 percent in 2012 vs. the peer group average of 10.2 percent. JPMorgan’s strong market positions in commercial lending, credit cards, and other consumer lending products could be further augmented by acquisition opportunities in both the U.S. and internationally." The firm also thinks JPMorgan will increase its dividend once again to 30 percent of 2012 earnings.
  
  
• Deutsche Bank sees earnings of 90 cents per share. Deutsche commented, "2012 capital deployment will likely be one of the highest post-CCAR, given capital remains strong (9.9 percent under Basel 1 and 7.7 percent under Basel 3 at 9/30) and building quickly. We believe dividend increases could push yields closer to 4 percent in 2012 (vs. about 2 percent on average for banks) and additional buybacks should be meaningful (with a 2 percent decline in shares possible). We also see more expense flexibility in capital markets businesses (both in 4Q and going forward) vs. peers."

Check out our earlier report for more details on the numbers.

Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results within seconds of their release. You can also check out JPMorgan's past performance at Streetinsider's JPMorgan's Income Statement.

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