Nomura Securities analyst Steven Chubak, noted that JPMorgan (NYSE: JPM) reported 2Q16 EPS of $1.55 ($1.51 excluding ~$200mn Visa Europe gain, with tax / litigation specials largely equal and offsetting), which exceeded both Nomura's $1.40 and cons. of $1.42. The beat was primarily driven by better results in FICC / DCM (+$0.04), which more than offset weakness in Consumer ex Visa Europe gain (-$0.02). JPM also surprised positively on expenses (+$.03), which more than offset higherthan-
expected credit costs (-$.02) across Consumer (Card, Auto) and CIB (Commodities). NII was flat QoQ as robust loan growth (+3% QoQ) was offset by lower NIM of 2.25% (-5bps QoQ).

The bottom line is: While JPM’s 2Q results were encouraging on multiple fronts, with shares trading at 1.3x TBV (and exceeding pre-Brexit levels), the analyst expects only modest O/P barring more constructive outlook commentary on trading / IBD (post Brexit); or better-than-anticipated NII guidance beyond 2016 given 2Q rate pressures / significant curve flattening (note: 2016 NII guidance of +$2bn YoY was reaffirmed). The latter should also eliminate any potential for
positive EPS revisions for 2017E despite the 2Q beat / positive flow through benefits on trading strength, as consensus still appears to incorporate one (or more) hikes through 2017, which may prove too aggressive.

No change to Neutral rating or price target of $67.00

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Shares of JPMorgan closed at $63.16 yesterday.