On May 28, 2013, we maintained our long-term recommendation on
JPMorgan Chase & Co.
) at Neutral. The reiteration was based on the company's strong
first-quarter results, which significantly surpassed the Zacks
GOLDMAN SACHS (GS): Free Stock Analysis
JPMORGAN CHASE (JPM): Free Stock Analysis
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JPMorgan's first-quarter earnings came in at $1.59 per share,
substantially beating the Zacks Consensus Estimate of $1.37.
Better-than-expected results were primarily driven by a fall in
operating expenses and provision for credit losses, partially
offset by lower-than-expected net revenue.
Following the first-quarter results, 19 of the 21 estimates for
2013 have been revised upward, raising the Zacks Consensus
Estimate 4.8% to $5.69 per share. Likewise, for 2014, 14 of the
20 estimates moved north, thereby making the Zacks Consensus
Estimate advance 3.3% to $5.98 per share. With the Zacks
Consensus Estimate increasing for both 2013 and 2014, the company
now has a Zacks Rank #2 (Buy).
The key reason behind JPMorgan's stable earnings amid the ongoing
sluggish economic recovery is its business diversification.
Moreover, the company is an asset for yield-seeking investors due
to its price appreciation and steady capital deployment
However, JPMorgan's top-line growth is expected to slacken in the
next few quarters, owing to weak trading revenues and net
interest margin contraction. Moreover, with the thrust of new
banking regulations, there will be a pressure on fees and loan
growth is likely to remain weak.
Other Banks Worth Considering
While we prefer JPMorgan, other well performing banks include
The Goldman Sachs Group, Inc.
State Street Corporation
). All these banks carry the same Zacks Rank as the former