JPMorgan (JPM) Bull/Bear Cases
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Price: $342.91 -1.15%
Rating Summary:
21 Buy, 26 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 14 | Down: 16 | New: 12
Rating Summary:
21 Buy, 26 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 14 | Down: 16 | New: 12
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Ahead of JPMorgan Chase & Co.'s (NYSE: JPM) fourth-quarter earnings on Friday, Deutsche Bank makes the Bull and Bear cases for the bank for 2011.
Deutsche Bank maintains a Buy rating on JPMorgan with a price target of $52 on the stock. Shares of the firm are down 23 cents to $44.28 in late market movement on Thursday.
The Bull arguments from Deutsche Bank on JPMorgan:
Capital expectations could finally be low enough and the analyst see JPMorgan meaningfully boosting its dividend and share repurchase program that will be announced in the first quarter of 2011. "While the dividend boost is likely to be in line with expectations, the buyback could be a positive surprise."
Net interest income at JPMorgan should see less headwinds in 2011 and expect net interest income to inflect sometime in the second half of the year.
The analysts see operating leverage improving throughout 2011. "Given now that most investment spend and regulatory fee drags are already reflected in the run-rate, revenue drags should be less going forward, and we expect more market share gains in credit card, commercial banking, and mortgage in 2011."
Bear arguments on JPMorgan:
The company will see mortgage-related issues in 2011, as the bank announced higher than expected mortgage repurchase expenses and litigation in the third quarter which stoked the flames for mortgage putback worries in October.
The analysts expect a loan runoff which could pressure revenue over time. "Much of JPM’s NIM pressure has been driven by the runoff of higher-yielding assets (such as the acquired Providian card book), certain mortgage/home equity loans, a series of reductions in the duration of the securities book, CARD Act, and lower purchase accounting accretion related to WM."
JPMorgan faces elevated risk from regulatory measures due to the banks diverse revenue stream. "In addition, Basel 3 liquidity requirements remain an unknown. But vs. a year ago, overall headline risk from regulation may be less."
Deutsche Bank maintains a Buy rating on JPMorgan with a price target of $52 on the stock. Shares of the firm are down 23 cents to $44.28 in late market movement on Thursday.
The Bull arguments from Deutsche Bank on JPMorgan:
Capital expectations could finally be low enough and the analyst see JPMorgan meaningfully boosting its dividend and share repurchase program that will be announced in the first quarter of 2011. "While the dividend boost is likely to be in line with expectations, the buyback could be a positive surprise."
Net interest income at JPMorgan should see less headwinds in 2011 and expect net interest income to inflect sometime in the second half of the year.
The analysts see operating leverage improving throughout 2011. "Given now that most investment spend and regulatory fee drags are already reflected in the run-rate, revenue drags should be less going forward, and we expect more market share gains in credit card, commercial banking, and mortgage in 2011."
Bear arguments on JPMorgan:
The company will see mortgage-related issues in 2011, as the bank announced higher than expected mortgage repurchase expenses and litigation in the third quarter which stoked the flames for mortgage putback worries in October.
The analysts expect a loan runoff which could pressure revenue over time. "Much of JPM’s NIM pressure has been driven by the runoff of higher-yielding assets (such as the acquired Providian card book), certain mortgage/home equity loans, a series of reductions in the duration of the securities book, CARD Act, and lower purchase accounting accretion related to WM."
JPMorgan faces elevated risk from regulatory measures due to the banks diverse revenue stream. "In addition, Basel 3 liquidity requirements remain an unknown. But vs. a year ago, overall headline risk from regulation may be less."
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