We issued an updated research report on
JPMorgan Chase & Co.
) on May 29, 2014. Management's lower guidance on market revenues
makes us apprehensive about the bank's top-line growth.
Further, JPMorgan reported lower-than-expected first-quarter 2014
results. The banking colossus came out with earnings of $1.28 per
share, missing the Zacks Consensus Estimate by 9.2%. Though prudent
expense management was reflected in the non-interest expenses,
pressure on top line and higher-than-expected provisions dominated.
Additionally, continued pressure on net interest margin remains a
concern for JPMorgan. Given the persistent low rate environment, no
significant improvement in interest yield is expected over the next
Also, a stringent regulatory environment and slow client activity
remain the major near-term concerns. Although JPMorgan has resolved
quite a many litigation issues in the past one year, it still faces
investigations from several federal agencies and a few foreign
governments. So, we expect continuing elevated legal expenses in
the near future.
Moreover, dismal first-quarter results and the subsequent events
failed to gain investors and analysts' confidence on the stock.
Hence, over the last 30 days, the analysts have been bearish on
JPMorgan, leading to a decline in the Zacks Consensus Estimate. For
2014, the Zacks Consensus Estimate slipped 2.5% to $5.45 per share,
while for 2015 it climbed down 1.5% to $6.09 per share.
JPMorgan presently has a Zacks Rank #4 (Sell).
Stocks That Warrant a Look
Some better-ranked major banks include
The Bank of New York Mellon Corp.
SunTrust Banks, Inc.
). All these stocks carry a Zacks Rank #3 (Hold).
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JPMORGAN CHASE (JPM): Free Stock Analysis
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