JPMorgan (JPM) Q2 EPS Early Read - Evercore Partners
Evercore Partners analyst Andrew Marquardt gave an early read of JPMorgan's (NYSE: JPM) Q2 results this morning.
First the analyst noted the $1.60 headline EPS number included a few specials that net added $0.03/shr - thus, initial view of core EPS is closer to $1.57 which beat their estimate of $1.47 and the consensus of $1.44.
Marquardt said overall the results were good "with strength in capital markets and ongoing credit costs while expenses a bit higher than expected, though likely due to better revs while spread revenue light due largely to LCR build during the quarter, not unexpected."
On the outlook, the analyst added "Outlook mixed so far on updated and more limited guidance, which we suspect will net out to something where spread revenue modestly worst vs prior while credit costs could persist better for longer and operating expenses might be heavier than prior guidance given better markets-related results. Notable commentary around capital where still expect to meet 9.5% T1C B3 by year-end (vs 9.3% currently which reflects new final rules which helped by 20bps vs NPR), but also gave add'l clarity on leverage ratio of 4.7% (vs our est'd 5.3%) where mgmt expects to be above new hurdle of 5% by 1Q15 with manageable impact."
The analyst expects the reaction in the stock to be muted positive given potential mixed outlook clarity and sustainability of 2Q drivers.
The firm maintained an Overweight rating and price target of $60.
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 $55.14 yesterday, with a 52 week range of $33.10-$55.90.
First the analyst noted the $1.60 headline EPS number included a few specials that net added $0.03/shr - thus, initial view of core EPS is closer to $1.57 which beat their estimate of $1.47 and the consensus of $1.44.
Marquardt said overall the results were good "with strength in capital markets and ongoing credit costs while expenses a bit higher than expected, though likely due to better revs while spread revenue light due largely to LCR build during the quarter, not unexpected."
On the outlook, the analyst added "Outlook mixed so far on updated and more limited guidance, which we suspect will net out to something where spread revenue modestly worst vs prior while credit costs could persist better for longer and operating expenses might be heavier than prior guidance given better markets-related results. Notable commentary around capital where still expect to meet 9.5% T1C B3 by year-end (vs 9.3% currently which reflects new final rules which helped by 20bps vs NPR), but also gave add'l clarity on leverage ratio of 4.7% (vs our est'd 5.3%) where mgmt expects to be above new hurdle of 5% by 1Q15 with manageable impact."
The analyst expects the reaction in the stock to be muted positive given potential mixed outlook clarity and sustainability of 2Q drivers.
The firm maintained an Overweight rating and price target of $60.
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 $55.14 yesterday, with a 52 week range of $33.10-$55.90.