Q1 Preview: Dividend Boost, Buyback Drive Continued Momentum for JPMorgan (JPM) into Results


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JPMorgan Chase & Co. ( JPM ) shares are trading slightly higher ahead of the company's first-quarter earnings, expected out before the market opens Wednesday. The stock is up0.17 percent Tuesday afternoon.

Analysts are looking for JPMorgan to report EPS of $1.16 on sales of $25.48 billion. Last quarter, the New York, NY-based financial institution posted EPS of $1.12 on revs of $26.1 billion. Looking back at the first quarter of last year, EPS for JPMorgan were $0.74 and sales were $27.67 billion.

Shares gained 5.9 percent through the quarter and is up 1.9 percent since then. JPMorgan shares closed-out 2010 about 0.6 percent lower from the beginning of the year.

Comparing P/E's, JPM is currently trading at 8.4x FY12 EPS estimates, vs. 7.2x for Bank of America ( BAC ), 8.6x for Citigroup ( C ), and 8.7x for Wells Fargo ( WFC ).

Data from Bloomberg has 25 analysts with a Buy on JPMorgan, 5 with a Hold, and none suggesting to Sell. The analyst price target average is $55.40, with a high of $61 and low of $50. Shares have traded in a range of $48.36 - $35.16 over the last 52-weeks.

Analyst Summary

  • Goldman Sachs recently increased its first-quarter EPS estimate on JPMorgan from $1.16 to $1.20. JPMorgan is rated Buy at Goldman Sachs, and is also on its esteemed Conviction Buy List.

  • Deutsche Bank is looking for EPS of $1.22. The firm believes JPMorgan revs are likely to be flat in the quarter, with net interest margin flat to down 5 basis points. Deutsche cites loan runoff and repositioning in the Corporate securities book as the two main catalysts. Deutsche is also looking for better trading catalysts when compared to peers, likely down 15 to 20 percent compared with down 20 to 40 percent for its peers. Expenses for JPMorgan are likely to decline about six-percent in the quarter.

    Credit card losses should be lower than expected at about 6.5 percent, and provision for loan losses should fall by about 10 percent quarter-over-quarter.

    Deutsche likes the surprise dividend boost and buyback, but is looking for more clarity on timing of the buyback as well as JPMorgan's targeted capital level.

    Deutsche has a Buy rating and $54 price target on JPMorgan.

  • Wells Fargo is looking for EPS of $1.20 from JPMorgan. The firm has an Outperform on JPMorgan, with valuation range of $51 - $54.
JPMorgan's earnings report is expected to be out at approximately 7:00am EDT.

Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results within seconds of their release.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing Stocks
Referenced Stocks: BAC , C , JPM , WFC

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